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Financial Management
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Yield of interest rate which is below than coupon rate, this yield is classified as

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Correct Answer: Option B
Yield of interest rate which is below than coupon rate, this yield is classified as yield to call. Yield to call (YTC) is a financial term that refers to the return a bondholder receives if the security is held until the call date, before the debt instrument reaches maturity.
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Muhammad Adil
Muhammad Adil 8 months ago
Correct answer: A. yield to maturity

Easy explanation:

Jab market interest rate (yield) < coupon rate, bond premium par sell hota hai

Investor ka total return agar bond maturity tak hold kare, usse yield to maturity kehte hain

Other options:

Yield to call → tab use hota hai jab bond maturity se pehle redeem ho

Yield to earning / yield to investors → ye standard terms nahi hain

Trick: Coupon vs market rate se jo yield milti hai, aur bond maturity tak rakha jaye, wo hamesha yield to maturity hoti hai.