AuthorTopic: general questions about bonds
muff
@2014-10-02 06:58:17
Can we have the following two bonds similar in most of the characteristics in the market at the same time?

Bond 1: Coupon 8%, YTM 8%.

Bond 2: Coupon 9%, YTM 9%

According to me, they canít be present because market rates at a point in time are fixed. So, YTM has to be same on bonds with diffr coupon rates. (Assume suitable data wherever necessary)
ryantwilson
@2014-10-04 05:15:06
Only if bond #2 is riskier in some respect.

(In practice questions for the CFA exams, this sort of thing shows up often. Not in the real world, however.)
muff
@2014-10-05 13:22:31
Yea, I do understand that there will be a difference in YTM if there is some kind of risk. I mean there has to be, but for instruments of same risk class, it shouldnít have been the case and that occured to me while I was reading FI. I am taking so much if time doing this. Donít know whether Iíll pass. I mean I have the whole of econ left and ethics is also there.

Anyway thanks

CFA Discussion Topic: general questions about bonds

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