Assume you have the following information

Finance Dec 23, 2020

Assume you have the following information. XYZ bond has a JD1000 face value The coupon rate = 6% The bond mature in 5 years The value of the bond = JD 1060 Select one: a. The yield to Maturity (YTM) is less than 6% b. The yield to Maturity (YTM) can't be calculated c. The yield to Maturity (YTM) is equal 6%

Expert Solution

option A; Yield to maturity will be less than 6%;

YTM will be less than coupon rate; if price> par value

YTM=coupon rate; if price=par value

YTM higher than coupon rate; if price<par value

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