Which one of the following relationships applies to a par value bond? Multiple Choice Yield to maturity > Current y...

Question

Question

Which one of the following relationships applies to a par value bond?

Multiple Choice

Answer 1

Answer #1

Ans Coupon rate > Current yield > Yield to maturity

Current Yield = Coupon amount / Current market value of the bond

Yield to Maturity = (Face Value /Current bond price) (1 / Years to Maturity) - 1

When we compare the above formulas we get Current yield > Yield to maturity

Answer 2

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