If a bond is selling below its face value,then its yield to maturity must be less than the bond's coupon rate.

Question

Quizplus · Accepted Answer

If a bond is selling below its face value, its yield to maturity is actually higher than the bond's coupon rate. This is because buyers will be paying less for the bond upfront, but will still receive the full face value upon maturity. Therefore, the yield to maturity must be high enough to compensate for the discount on the purchase price.

If a Bond Is Selling Below Its Face Value,then Its