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Q: The yield to maturity on a discount bond is

  • 1
    equal to both the coupon rate / current yeild
  • 2
    less than the current yeild but greater than the coupon rate
  • 3
    greater than both the coupon rate / current yeild
  • 4
    equal to the current yeild but greater than the coupon rate
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Answer : 1. "equal to both the coupon rate / current yeild"
Explanation :

Answer: A) equal to both the coupon rate / current yeild Explanation: Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.

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