Which of the following $1,000 face-value securities has the lowest yield to maturity?
A) A 5 percent coupon bond selling for $1,000
B) A 10 percent coupon bond selling for $1,000
C) A 15 percent coupon bond selling for $1,000
D) A 15 percent coupon bond selling for $900

Question

Quizplus · Accepted Answer

The yield to maturity is lowest for bonds selling at par value, and since all options except D are selling at par, the bond with the lowest coupon rate (5%) will have the lowest yield to maturity.

Which of the Following $1,000 Face-Value Securities Has the Lowest