Assume that a bond has an 8% coupon, paid annually, is priced to have a YTM...

Question

Question

business finance

Answer 1

Answer #1

The answer is

a.The YTM would increase above 10%

YTM is calculated from coupon rate + increase in price of bond

Hence, higher the coupon frequency, higher would be the YTM

Hence, the answer is a. YTM would increase

Answer 2

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