Question

Everything else held constant, the yield-to-maturity (YTM) of a bond __________.

		will equal the coupon rate if the bond sells at par value
		will decrease if the price of the bond increases
		A and B are both correct
		will be lower than the coupon rate if the bond sells below par value

Answer 1

Everything else held constant, the yield-to-maturity of a bond

• Will equal the coupon rate if the bond sells at par value because the only return/ yield for the bond will be that of the coupon
• Will decrease if the price of the bond increases as the investor has paid above the par value to purchase the bond and will earn a yield lower than the coupon rate

A and B both are correct

If the bond sells below par, the YTM on the bond will be higher than it's coupon rate as you also eaen because of the difference in maturity value and purchase price of the bond.

Do let me know in the comment section in case of any doubt.