I have several questions regarding bond interest components I am kinda confused about what each of the interest rate in the bond stands for. Theres the coupon rate, YTM, and discount rate, and there is the market interest rate that affects the discount rate and YTM, but not the coupon rate? And when you issue a bond, does the coupon rate match the current market rate? Are the market rates the same for all these different components of interest? Thx fo rthe help. I forgot alot of stuff in book 5 after 2 weeks of reviewing FSA
And when you issue a bond, does the coupon rate match the current market rate? It depends whether the bond issued at discount (Yield is more than Coupon) or at Premium (Yield is less than Coupon). Coupon rates are fixed.