A bond is trading at a premium What does that say about its YTM relative to its coupon rate YTM Coupon Rate YTM Coupon Rate YTM Coupon Rate Two bonds are rated B and BB Which would you expect to have the higher yield B bond BB bond They are the same A company just issued an unexpected poor earnings report, throwing into doubt their ability to continue their debt payments What should happen to the price of their bonds They should go down They should go up They should stay the same

Question: A bond is trading at a premium. What does that say about its YTM relative to its coupon rate? YTM < Coupon Rate YTM =

A bond is trading at a premium. What does that say about its YTM relative to its coupon rate?

YTM < Coupon Rate
YTM = Coupon Rate
YTM >Coupon Rate

Two bonds are rated B+ and BB−. Which would you expect to have the higher yield?

B+ bond
BB- bond
They are the same

A company just issued an unexpected poor earnings report, throwing into doubt their ability to continue their debt payments. What should happen to the price of their bonds?

They should go down
They should go up
They should stay the same

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