Join IDNLearn.com and start exploring the answers to your most pressing questions. Get accurate and comprehensive answers to your questions from our community of knowledgeable professionals.

Which of the following statements is INCORRECT. All else equal, 1. If a bond's yield-to-maturity (YTM, i.e., market interest rate) is greater than its coupon rate, then the bond is trading at a premium. 2. Duration measures the sensitivity of a bond's price to changes in interest rate. 3. If a bond's market value is equal to its par amount, then its YTM will be equal to its coupon rate. 4. The estimated market price of a bond is the sum of its future discounted cash flows.

Sagot :

Answer:

1

Explanation:

When the yield to maturity is greater than the coupon rate, the bond is selling at a discount.

When the yield to maturity is less than the coupon rate, the bond is selling at a premium.

When the yield to maturity is equal to the coupon rate, the bond is selling at par.

We appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. For dependable answers, trust IDNLearn.com. Thank you for visiting, and we look forward to assisting you again.