Can we have the following two bonds similar in most of the characteristics in the market at the same time? Bond 1: Coupon 8%, YTM 8%.
Bond 2: Coupon 9%, YTM 9% According to me, they can’t be present because market rates at a point in time are fixed. So, YTM has to be same on bonds with diffr coupon rates. (Assume suitable data wherever necessary)
Only if bond #2 is riskier in some respect.
(In practice questions for the CFA exams, this sort of thing shows up often. Not in the real world, however.)
Thank you.
I hope you had a good night’s sleep 
Agreed, this will be possible only if there is some kind of difference, especially risk
Yea, I do understand that there will be a difference in YTM if there is some kind of risk. I mean there has to be, but for instruments of same risk class, it shouldn’t have been the case and that occured to me while I was reading FI. I am taking so much if time doing this. Don’t know whether I’ll pass. I mean I have the whole of econ left and ethics is also there.
Anyway thanks
Yes as per correctly explained by S2000 magician and exotichedge, YTM is IRR on the bonds it can differ if there is a kind of difference which effect the individual bond prices.
Thanks.