spartanag07

So back to your original question, how could the answer be D? Shouldn't it be C,
Nominal < YTM?

cchang

The question isn't that difficult - I think it looks that way due to a few interrelated terms.

In my view, Coupon rate = Nominal yield = Coupon Yield.

Can someone please confirm?

rkapoor

The coupon rate, nominal yield, and current yield would only be the same if________

bluejazzy

Thanks Joey. Agreed that these would all be equal if the term structure of interest rates are flat. However, the question refers to 'coupon yield'.

"Coupon rate = Nominal yield = Coupon Yield" should be true since they all use: annual coupon / face value

Is this correct?

shootingstar

Nope. It's the same if the bond is selling for par.

thisisbrianly

Thanks SpyAli - I feel comfortable differentiating between YTM, Coupon Rate and Current Yield.

My query is about the other unconventional terms which have been thrown into the question: Nominal Yield and Coupon Yield.

My finding is: "Coupon rate = Nominal yield = Coupon Yield". Have a read on the previous 5 posts above for details.

Are you able to confirm?

lc26mizzou

Great, thanks!