Premium vs Discount Bonds Explained | No Calculator Needed

AnalystPrep · Beginner ·📄 Research Papers Explained ·3w ago

About this lesson

Some CFA questions can be answered without any calculations if you understand the key relationships. In this video, we explain how to quickly determine whether a bond is trading at a premium or a discount. If the coupon rate is higher than the yield to maturity, the bond will trade above par. If it is lower, the bond will trade below par. In this example, the coupon is 12% and the yield is 11%, so the bond trades at a premium. Learning shortcuts like this can save time and reduce mistakes in the exam. If you are preparing for the August 2026 CFA exam, our Live Online Classes help you master concepts like this in a simple and practical way. Get started here: https://analystprep.com/cfa-level-1-live-online/ Save 30% this June using code AP30. #CFA #CFALevel1 #CFAPrep #FixedIncome #BondPricing #FinanceEducation #August2026CFA #AnalysPrep

Original Description

Some CFA questions can be answered without any calculations if you understand the key relationships. In this video, we explain how to quickly determine whether a bond is trading at a premium or a discount. If the coupon rate is higher than the yield to maturity, the bond will trade above par. If it is lower, the bond will trade below par. In this example, the coupon is 12% and the yield is 11%, so the bond trades at a premium. Learning shortcuts like this can save time and reduce mistakes in the exam. If you are preparing for the August 2026 CFA exam, our Live Online Classes help you master concepts like this in a simple and practical way. Get started here: https://analystprep.com/cfa-level-1-live-online/ Save 30% this June using code AP30. #CFA #CFALevel1 #CFAPrep #FixedIncome #BondPricing #FinanceEducation #August2026CFA #AnalysPrep

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