The yield to maturity is always equal to the coupon rate of a bond.

Question

Quizplus · Accepted Answer

The yield to maturity and the coupon rate of a bond are two different things. The coupon rate is the interest rate that is paid annually on the bond's face value, while the yield to maturity is the total return that an investor will earn over the life of the bond, taking into account the price paid for the bond and the time left until maturity. The yield to maturity can be higher or lower than the coupon rate, depending on the current market interest rates and the price of the bond.

The Yield to Maturity Is Always Equal to the Coupon