INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.
-If you buy a bond at a premium,its yield to maturity will be [higher | lower] than the coupon yield.

Question

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-If you buy a bond at a premium,its yield to maturity will be [higher | lower] than the coupon yield.

Quizplus · Accepted Answer

When you buy a bond at a premium, its price is above its face value, which means the yield to maturity will be lower than the coupon yield because the bondholder will receive less return relative to the higher purchase price.

INSTRUCTIONS: Choose the Word or Phrase in [ ] Which