SIE practice questionmediumYield Calculations
If a bond is purchased at par, which is TRUE regarding its yields?
- AYTM and YTC are always the same
- BYTM exceeds current yield
- CCurrent yield exceeds coupon rate
- DCoupon, current, and YTM are equal✓ Correct answer
Explanation
Why D — Coupon, current, and YTM are equal
At par, coupon rate = current yield = YTM, since there’s no premium or discount. If not at par, the yields diverge.
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