If a bond is selling at a higher market price than its par value, then?
اگر کوئی بانڈ اپنی اصل قیمت سے زیادہ مارکیٹ قیمت پر فروخت ہو رہا ہو تو کیا ہوگا؟
- P is equal to par value and YTM is equal to coupon rate
- P is lower than par value and YTM is higher than coupon rate
- P is higher than par value and YTM is lower than coupon rate
- None of these
Explanation
- When a bond sells above its par value, its YTM is lower than its coupon rate.
- Par value is the face value of the bond.
- If market price > par value, the bond is trading at a premium.
- For a premium bond, the yield to maturity (YTM) < coupon rate.
- Therefore, P > Par Value and YTM < Coupon Rate.
Last verified on 12-08-2026
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