The current yield and yield to maturity are equal when the bond is initially sold for its face value.

Question

The current yield and yield to maturity are equal when the bond is initially sold for its face value.​

Quizplus · Accepted Answer

When a bond is initially sold at face value, the coupon rate (which determines the current yield) is equal to the yield to maturity. This is because the yield to maturity takes into account not only the coupon payments but also any premium or discount on the bond's price. However, if the bond is sold at a premium or discount, the yield to maturity and the current yield will be different.

The Current Yield and Yield to Maturity Are Equal When