Bond Yields
For a bond purchased above par value, which yield will be the HIGHEST?
Premium = paid more than par. Coupon rate remains highest because it ignores premium.
Complete Analysis & Legal Rationale
For a premium bond, the nominal (coupon) yield is the highest because it is based on par value, not the higher purchase price. The order from highest to lowest is: Coupon > Current Yield > YTM > YTC.
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:
YTC is the lowest yield for premium bonds.
YTM is lower than current yield for premium bonds.
Current yield is lower than coupon rate but higher than YTM for premium bonds.
Matches the verified teaching point in the explanation.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.