Answer:
Correct option is (C)
Step-by-step explanation:
Yield to maturity or YTM is the expected annual return rate that the investor receives upon holding the bond until maturity.
Coupon rate is the return rate the investor receives from a particular bond held by him.
While coupon rate remains fixed till maturity of the bond, yield fluctuates throughout the period. Yield and price of bond are inversely related. As yield increases, price of bond falls as investors would go with better options. If yield to maturity is below coupon rate, then the bond is said to be sold at premium. A bond sold at premium is priced higher than face value.