Bond Yields
For a bond trading at a discount, which yield is the highest?
For discount bonds, the yield order from lowest to highest is: Coupon < Current Yield < YTM < YTC. Yield to call is highest because the investor receives the gain (from discount to call price) over a shorter time period
Complete Analysis & Legal Rationale
For discount bonds, the yield order from lowest to highest is: Coupon < Current Yield < YTM < YTC. Yield to call is highest because the investor receives the gain (from discount to call price) over a shorter time period than maturity.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.