Mock exams simple question- Bond fundamentals

CFA Level III Fixed Income
#1

Question asks which one of these comments is correct. Why is it not 3? Realized return = coupon when rates are invested at the coupon rate.

Comment 1: There are three main ways to approach fixed income returns: discounted cash flow, risk premium approach, and including fixed income asset classes in an equilibrium model.

Comment 2: Yield-to-maturity (YTM), one of the most commonly used metrics in valuing fixed income instruments, is the single discount rate that equates the present value of a bond’s cash flows to its par value.

Comment 3: The only reason a bond’s realized return may not equal the initial YTM isthat the cash flows may be reinvested at rates above or below the initialYTM.

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#2

Comment 3: The only reason a bond’s realized return may not equal the initial YTM isthat the cash flows may be reinvested at rates above or below the initialYTM.

You may sell it at a loss. From what you have writtent there is no indication we are holding to maturity.

#3

Why is comment 2 incorrect?

#4

YTM is not just about price and par. It includes coupons and incorporates re-investment.