What is the relationship between a bonds market price and, Ask an Expert

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

A bond's market price relies on its yield to maturity abbreviated as YTM. While a bond has a YTM greater as compared to its coupon rate, it sells at a discount from its face value. While the YTM is equal to the coupon rate and market price equals the face value. While the YTM is less as compared to the coupon rate, the bond sells at a premium over face value.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9543958

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