The ________ of a coupon bond and the yield to maturity are inversely related.
A)price
B)par value
C)maturity date
D)term

Question

Quizplus · Accepted Answer

The price of a coupon bond and the yield to maturity have an inverse relationship. As the yield to maturity increases, the price of the bond decreases, and vice versa. This is because when the yield to maturity is higher than the coupon rate, investors demand a lower price for the bond to compensate for the lower coupon payments. Conversely, when the yield to maturity is lower than the coupon rate, investors are willing to pay a higher price for the bond to receive the higher coupon payments.

The ________ of a Coupon Bond and the Yield to Maturity