SIE practice questionmediumYield to Maturity (YTM)
An investor buys a 5% bond at 95, with 5 years to maturity. Which yield will be highest?
- ACoupon rate
- BCurrent yield
- CYield to maturity✓ Correct answer
- DYield to call
Explanation
Why C — Yield to maturity
Buying at a discount, YTM is higher than both the coupon rate and current yield. Yield to call could be higher or lower, but without a call feature described, YTM is the highest among the given choices.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Debt Securities questions