Question: 1 What is the difference between the coupon rate and

1. What is the difference between the coupon rate and the YTM?
2. How does a bond issuer decide on the coupon rate to set on its bonds?
3. What is the relationship between bond prices and its YTM?
4. What is a discount bond? a premium bond?
5. All else remaining same, which has more interest rate risk, a long-term bond or a short-term bond?
6. All else remaining same, which has more interest rate risk, a low-coupon bond or a high-coupon bond?
7. A Bond is currently selling for $940 and has a coupon rate of 7%. Should the YTM be higher or lower than 7%?
8. A Bond is currently selling for $1040 and has a coupon rate of 8%. Should the YTM be higher or lower than 8%?


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  • CreatedAugust 05, 2013
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