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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 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".
Is a bond's par value not necessarily the same as its market value?
true
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.
Tell me something about valuation of a bond?
Bond valuation has one fundamental principle. This principle is that the bond has a value that is equal to the present value of the expected cash flow that will occur in the future.
What is the difference between bond premium and bond discount?
A bond premium occurs when a bond is sold for more than its face value, typically because it offers a higher interest rate compared to current market rates. In contrast, a bond discount is when a bond is sold for less than its face value, often because it has a lower interest rate than prevailing market rates. The premium or discount reflects the bond’s yield relative to market conditions and affects the total return for investors.
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".
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 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.
What is the amount of a bond called?
I think it's called a market value.
When the interest rate on a bond and its yield to maturity are equal the bond will trade at par value?
wes
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.
How do you calculate fair market value for date of death for bonds?
There are websites that will allow you to input the bond's CUSIP number and date, and it will tell you the value. Google "bond" "CUSIP" and "value".
A bond pays semiannual interest of 50 They mature in 15 years and have a par value of 1000 The market rate of interest is 8 percent The market value of the bonds is?
To calculate the market value of the bonds, we can use the present value of future cash flows formula. The bond pays $50 semiannually, resulting in 30 payments (15 years x 2). The market interest rate is 8% annually, or 4% semiannually. The present value of the annuity (interest payments) and the present value of the par value at maturity can be calculated and summed to find the market value of the bond, which is approximately $1,165.51.
What are Bond Premiums and Discounts?
Bond premiums refer to bonds that are issued at a price above its face value. for example, if the market rate for a bond is 8% and the stated rate on the bond is 9% then it would be a premium bond. Bond discounts refer to bonds that are issued at a price below its face value. For example, if the market rate for a bond is 9% and the stated rate on the bond is 10%, then it would be a discount bond.
