When a Bond Trades at a Discount to Par, the Yield

question 19

True/False

When a bond trades at a discount to par, the yield to maturity on the bond will exceed the required return.
In bond valuation, "Yield to Maturity" and "Required Rate of Return" are synonymous, all other things equal.

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Definitions:

Illusory Promise

An agreement that lacks a firm commitment or terms, making it unenforceable by law.

Accord and Satisfaction

A legal settlement where a debtor offers payment or performance different from what was originally agreed, and the creditor accepts it as full settlement of the debt.

UCC

A complete collection of legal regulations that administer all business dealings across the United States, known as the Uniform Commercial Code.

Preexisting Duty

A promise to do something that one is already obligated to do. It is not considered valid consideration.