If a bond is purchased at a premium,its current yield will be higher than its coupon rate of interest.

Name: If a bond is purchased at a premium,its current yield will be higher than its coupon rate of interest.
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Question

If a bond is purchased at a premium,its current yield will be higher than its coupon rate of interest.​

Quizplus · Accepted Answer

If a bond is purchased at a premium, it means the price paid for the bond is higher than its face value, and therefore, the coupon rate of interest remains the same. As the coupon payments are fixed, the current yield of the bond will be lower than the coupon rate of interest.

If a Bond Is Purchased at a Premium,its Current Yield