Change the initial YTM and Coupon and observe the impact on the initial bond

Change the initial ytm and coupon and observe the

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Change the initial YTM and Coupon and observe the impact on the initial bond price (premium or discount). Change the future interest rate and holding period, and observe the impact on the bond's future selling price and holding period yield. Total Return Current Yield Capital Gain/(Loss) Total Cash Flows Total Cash Flows To Purchaser YTM < Coupon rate -- Premium YTM = Coupon rate -- At Par YTM > Coupon rate -- Discount Notice the total return is made up of two  parts. The current yield and the expected  capital gain/loss. Notice these will change over time if the  bond's value changes.  If the future interest rate increases, then  the bond's selling price will be lower than  initially expected, and the HPY will be  lower than the initial YTM. On-the-other-hand, if the future interest  rate drops, then the bond price will be  higher than initially expected, and the  HPY will be higher than the initial YTM. The only way we can be certain of  earning the YTM that we initially  expected, is that if we hold the bond  until maturity, or if interest rates remain  constant.  See the calculation of the  selling price below.
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