A bond with a coupon rate of 8% will also have a yield to maturity of 8%.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. It takes into account not only the bond's coupon rate, but also its price, par value, and time to maturity. The YTM may be higher, lower or equal to the bond's coupon rate depending on whether the bond is selling at a premium, discount or par value respectively. Therefore, it is not always true that a bond with a coupon rate of 8% will have a YTM of 8%.

A Bond with a Coupon Rate of 8% Will Also