The probability of default is zero.
Answer: Option 1.
Explanation:
Yield to maturity (YTM) = [(Face value/Present value)1/Time period]-1. On the off chance that the YTM is not exactly the security's coupon rate, at that point the market estimation of the security is more prominent than standard worth ( premium security).
In the event that a bond's coupon rate is not as much as its YTM, at that point the bond is selling at a rebate or it is being sold at a discount rate.
