what is the relationship between a bonds market


What is the relationship between a bond's market price and its promised yield to maturity?  Explain.

A bond's market price reckon on its yield to maturity (YTM).  When a bond has an YTM greater than its coupon rate, it sells at a discount from its face value.  When the YTM is equivalent to the coupon rate, the market price equals the face value.  When the YTM is smaller than the coupon rate the bond sells at a premium over face value.

 

Request for Solution File

Ask an Expert for Answer!!
Financial Management: what is the relationship between a bonds market
Reference No:- TGS0306317

Expected delivery within 24 Hours