# When the required rate of return on a bond is less than the bond’s coupon interest rate the bond?

## How do maturity coupon rate and yield to maturity affect bond duration?

Duration is inversely related to the bond’s coupon rate. Duration is inversely related to the bond’s yield to maturity (YTM). Duration can increase or decrease given an increase in the time to maturity (but it usually increases). You can look at this relationship in the upcoming interactive 3D app.

## What is the relationship between the current yield and YTM for premium bonds for discount bonds for bonds selling at par value?

For premium bonds, the current yield exceeds the YTM; for discount bonds the current yield is less than the YTM; and for bonds selling at par value, the current yield is equal to the YTM.

## What is the relationship between coupon rate and yield to maturity?

Yield to maturity Coupon rateThe higher a bond’s coupon rate, or interest payment, the higher its yield. That’s because each year the bond will pay a higher percentage of its face value as interest. PriceThe higher a bond’s price, the lower its yield.