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Well its the price that equates the number of buyer and sellers of that bond on any given day. The price is generated based on the risk profile of the particular bond. So for example is a company's risk profile is increasing (i.e. BP where obama is about to slam them for a settlement) then the risk profile goes up - fewer people want to buy or own the bonds and so the price goes down.
What else can I help you with?
When the market rate of interest is equal to the stated rate of interest on the bond the bond will require?
When the market rate of interest is equal to the stated rate of interest on a bond, the bond will trade at its par value, or face value. This means that investors are willing to pay the full amount for the bond because the yield they would receive from the bond matches the current market rate. Consequently, there is no premium or discount applied to the bond's price.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
Are bonds sold at a face value when the contract is equal to the market rate of interest?
Yes, bonds are typically sold at face value (also known as par value) when the contract interest rate, or coupon rate, is equal to the market rate of interest. In this scenario, investors find the bond's return consistent with current market conditions, leading to no premium or discount on its price. If the coupon rate deviates from the market rate, the bond may then be sold at a premium or a discount.
Is a bond's par value not necessarily the same as its market value?
true
What is a bond selling at face value called?
A bond selling at face value is referred to as a "par bond." This means the bond is being sold for its nominal or par value, which is the amount that will be repaid to the bondholder at maturity. When a bond is at par, its market price equals its face value, indicating that the interest rate, or coupon rate, is in line with current market rates.
When the market rate of interest is equal to the stated rate of interest on the bond the bond will require?
When the market rate of interest is equal to the stated rate of interest on a bond, the bond will trade at its par value, or face value. This means that investors are willing to pay the full amount for the bond because the yield they would receive from the bond matches the current market rate. Consequently, there is no premium or discount applied to the bond's price.
What is market rate of bond?
Market rate of bond is that rate at which that bond will be sale in market and it is different from face value of bond as well as book value of bond.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
Are bonds sold at a face value when the contract is equal to the market rate of interest?
Yes, bonds are typically sold at face value (also known as par value) when the contract interest rate, or coupon rate, is equal to the market rate of interest. In this scenario, investors find the bond's return consistent with current market conditions, leading to no premium or discount on its price. If the coupon rate deviates from the market rate, the bond may then be sold at a premium or a discount.
Why market value of a bond will fall when the interest rate rise on new bonds of equal risk?
Because the bond is no longer making money at the rate of current prices. Its future value is less than other equally face bonds so its market price dropes to compensate
Is a bond's par value not necessarily the same as its market value?
true
What is the value of the U.S. bond market?
145 trillion
What is a bond selling at face value called?
A bond selling at face value is referred to as a "par bond." This means the bond is being sold for its nominal or par value, which is the amount that will be repaid to the bondholder at maturity. When a bond is at par, its market price equals its face value, indicating that the interest rate, or coupon rate, is in line with current market rates.
What is the sale amount of a bond called?
The sale amount of a bond is called the face value or par value of the bond. It is the amount that the bond issuer agrees to repay to the bondholder upon maturity.
When the interest rate on a bond and its yield to maturity are equal the bond will trade at par value?
wes
What is the amount of a bond called?
I think it's called a market value.
Why does a bond's value fluctuate over time?
A bond's value fluctuates over time due to changes in interest rates, credit risk, and market conditions. When interest rates rise, bond values decrease, and vice versa. Additionally, changes in the issuer's creditworthiness and overall market conditions can also impact a bond's value.
