a bond has an bid yield of 6.2%. the coupon is 5%, maturity is 4 years. redemption is at 10% premium.
so, the MV can be computed which is 103.72
my question: rule: if YTM > Coupon then MV < Par
but in this case it is not so.
can you pls explain y?
thank u
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YTM and Coupon Rate
9y ago#1It is because the redemption is at a premium.
Your 'rule' is only completely true when the redemption is at par.
thank u sir!
9y ago#3You are welcome :-)
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