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    • Question

      A bond with a face value of ₹1,000, coupon of 10%, and

      market price ₹950 has a YTM that is:
      A Equal to 10% Correct Answer Incorrect Answer
      B Less than 10% Correct Answer Incorrect Answer
      C More than 10% Correct Answer Incorrect Answer
      D Zero Correct Answer Incorrect Answer
      E Cannot be determined Correct Answer Incorrect Answer

      Solution

      Since the bond is trading at a discount, the effective yield (YTM) is higher than the coupon rate.

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