Bond Yields
For a bond trading at a premium, which yield is typically the LOWEST?
For premium bonds, the yield order from lowest to highest is: YTC < YTM < CY < NY. Yield to call is lowest because if the bond is called, the investor loses the premium faster and receives fewer interest payments.
Complete Analysis & Legal Rationale
For premium bonds, the yield order from lowest to highest is: YTC < YTM < CY < NY. Yield to call is lowest because if the bond is called, the investor loses the premium faster and receives fewer interest payments.
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.