Financial Markets

Multiple Choice

Which of the following 1000 Face Value securities has the lowest yield to maturity?

  • A coupon bond with a 15% coupon rate selling for 900. 
  • A coupon bond with a 5% coupon rate selling for 1,000. 
  • A coupon bond with a 15% coupon rate selling for 1,000. 
  • A coupon bond with a 10% coupon rate selling for 1,000. 
YTM = CF (Coupon rate * Face Value)/ PV - 1 
 
0.05 = 0.05 * 1000 / 1000
 

Diskussion