Question: If the yield to maturity ( YTM ) on a bond is greater than the coupon rate, it typically indicates that the bond is trading

If the yield to maturity

(

YTM

)

on a bond is greater than the coupon rate, it typically indicates that the bond is trading at a discount to its face value. This means investors are willing to pay less for the bond now in exchange for higher returns over time, reflecting higher perceived risk or changes in interest rates. Given this scenario, what might be some reasons for the bond trading at a discount?

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