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JAIIB AFM Unit 22 — Financial Mathematics - Calculation of YTM: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 3 of the November 2026 cycle (28 November 2026)

This page is a free slice of our JAIIB AFM question bank for Unit 22 — Financial Mathematics - Calculation of YTM (Module C — Financial Management). The Mock Centre holds 19 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

AFM · Module C19 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Bondholder = CREDITOR of the issuer; coupon is paid on FACE value; corporate bonds in India = debentures; government bonds = G-Secs (sovereign, 'risk-free').
  2. Bond value = PV of all coupons + PV of redemption value, discounted at the required yield.
  3. Current yield = annual coupon ÷ current MARKET price; YTM = the discount rate equating PV of all future flows with today's price (found by trial/interpolation).

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
A bondholder is, in relation to the issuing firm, a:
Why (b): A bond is DEBT — the holder lends and becomes a CREDITOR of the firm.
Question 2 of 5
The coupon rate is applied on the bond's:
Why (b): Coupon = coupon rate × FACE (par) value, stated on the bond — never the market price.
Question 3 of 5
Which is correct about government bonds?
Why (b): Government bonds carry NO DEFAULT risk (sovereign backing) — though they fully carry interest-rate risk.
Question 4 of 5
The Current Yield formula is:
Why (b): Current yield = annual coupon ÷ CURRENT MARKET PRICE — the running return on what you pay today.
Question 5 of 5
The relationship between bond price and YTM is:
Why (b): Bond prices and yields move INVERSELY — harder discounting shrinks every present value.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Coupon rateCurrent yieldOn face value vs on market price
Current yieldYTMOne-year snapshot vs full-life discount rate
Practise all 19 questions on Unit 22. The free demo opens a slice of every subject with the same explanations; the AFM Online-only pass unlocks all 1,681 AFM questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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← Unit 21: Financial Mathematics - Calculation of Interest and Annuities · Unit 23: Financial Mathematics - Forex Arithmetic → · All AFM units · JAIIB 2026 guide

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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.