As the yield to maturity increases, the:

Question

Quizplus · Accepted Answer

As the yield to maturity (YTM) increases, the present value of the bond's future cash flows decreases, making the investor willing to pay less for the bond. This is because the YTM represents the return an investor will receive if they hold the bond until maturity, assuming all payments are made as scheduled. A higher YTM means the bond's cash flows are discounted at a higher rate, reducing their present value and thus the price an investor is willing to pay.

As the Yield to Maturity Increases, The