What is the correct order of yields for a discount bond from highest to lowest?

When evaluating the yields for a discount bond, it's important to understand what each yield represents. A discount bond is priced below its face value, meaning it sells for less than the amount that will be paid back at maturity.

The yield to maturity (YTM) reflects the total return an investor can expect to earn if the bond is held until maturity, taking into account both the interest payments and any capital gain realized from the bond being purchased at a discount. The yield to call (YTC) applies primarily to callable bonds, representing the yield if the bond is called before its maturity date, which at a discount would also generally be higher than both the current yield (CY) and nominal yield (NY) since it accounts for the potential capital appreciation.

Next is the current yield (CY), calculated as the coupon payment divided by the current market price. For a discount bond, this yield will be lower than the YTM and YTC but still positive, as investors are receiving interest payments.

The nominal yield (NY), or stated rate, remains constant and does not account for the bond's selling price. For a discount bond, this yield is the lowest because it does not factor in the additional return from buying the bond at a lower price.

Thus