Question

The price of a coupon bond and the yield to maturity are ________ related; that is, as the yield to maturity ________, the price of the bond ________.

Answer 1

Based on the relationship between the above mentioned measures, the following is true:

• Price and yield to maturity are inversely related.
• When YTM rises, the price of the bond falls.

What is Yield to Maturity?

• It is the discount rate on the bond.
• It shows the riskiness of the bond.

When the YTM is high, it means that the bond is more risky which leads to it having a lower price to compensate for the risk. The reverse is true.

Find out more on YTM at https://brainly.com/question/15172286.