How Bond Discounts Increase Yield Without Changing Coupons
https://youtu.be/YkyGYrKIv9k
A bond discount changes yield without changing coupon #Shorts
A lower purchase price does not rewrite a fixed coupon. Imagine a bond with one thousand dollars of face value and a five percent annual coupon. It pays fifty dollars a year, assuming the issuer makes the promised payments. At a purchase price of one thousand dollars, that fifty dollars is a five percent current yield. At nine hundred dollars, t...
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