Yields !!!! and lot of them

Which of the following relationships is least accurate? A. Premium bonds: CR >YTM ; nom yield > CY B. Premium bonds: nom yield > CY ; CY > YTM C. Discount bonds: CR < YTM ; nom yield < YTM D. Discount bonds: CY < YTM ; nom yield > YTM CR = coupon rate nom yield = nominal yield YTM = yield to maturity CY = current yield

D

D nominal yield=coupon rate (but its not same as nominal spread)

sure it is D

correct !!!

agreed one way to remember this kind of relationship : --> For discount bond: nominal yield < current < YTM --> For premieum bond: nominal yield > current > YTM

Simple way to remember the relationships Premium bonds: nom yield > CY > YTM Discount bonds: YTM > CY > nom yield ( just reverse the positions dont change the signs)

D!

Draw the see saw and stick current yield in the middle of nominal and YTM.