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If a bond is purchased at a premium, the yield to maturity is A) the same as the current yield. B) lower than the nominal yield. C) higher than the nominal yield. D) higher than the current yield.

Answer :

ADEFIOYELAOYEGO

If a bond is purchased at a premium, the yield to maturity is higher than

the nominal yield.

What is Nominal yield?

This is defined as the return of a bond is determined by the percentage of

the face value while Current yield deals with current market value.

Yield to maturity is the total return anticipated on a bond if the bond is

held until it matures and is usually higher than the nominal yield.

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