Bond Yields
A bond is trading at par. Which statement about its yields is TRUE?
When a bond trades at par value, all four yields (nominal, current, YTM, and YTC) are equal. There is no capital gain or loss to affect the total return calculations.
Complete Analysis & Legal Rationale
When a bond trades at par value, all four yields (nominal, current, YTM, and YTC) are equal. There is no capital gain or loss to affect the total return calculations.
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.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described 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.