BOND PRICE Meaning and
Definition
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Bond price refers to the market value or the price at which a bond is bought or sold in the financial market. It represents the price at which a bondholder is willing to purchase or sell a bond. It is an important metric that determines the return an investor will receive from investing in a bond.
The bond price is influenced by various factors including the interest rate environment, credit rating of the issuer, the time remaining until maturity, supply and demand dynamics in the bond market, and prevailing economic conditions. Generally, the bond price has an inverse relationship with interest rates, meaning that as interest rates rise, the bond price falls, and vice versa.
The bond price is usually expressed as a percentage of the bond's face value or par value. For instance, if a bond with a face value of $1,000 is trading at 95, the bond price is $950.
Investors use bond prices to assess the current value of their bond holdings and to determine whether to buy or sell bonds. The price of a bond also plays a crucial role in calculating the yield-to-maturity (YTM) and yield-to-call (YTC), which reflect the overall return on investment from holding the bond until maturity or until it is called by the issuer.
Overall, the bond price serves as a key indicator of the value of a bond in the financial markets, allowing investors and market participants to make informed decisions about their bond investments.
Common Misspellings for BOND PRICE
- vond price
- nond price
- hond price
- gond price
- bind price
- bknd price
- blnd price
- bpnd price
- b0nd price
- b9nd price
- bobd price
- bomd price
- bojd price
- bohd price
- bons price
- bonx price
- bonc price
- bonf price
- bonr price
- bone price
Etymology of BOND PRICE
The word "bond" comes from the Middle English word "bonde" which means a binding or joining, ultimately derived from the Old English word "bendan" meaning "to bind". In the context of finance, a bond refers to a fixed income investment where an investor lends money to a borrower (usually a corporation or government) for a specified period, usually with periodic interest payments.
The term "price" comes from the Old French word "pris" meaning "value" or "worth", which further originated from the Latin word "pretium" meaning "price" or "value". In finance, the term "price" refers to the amount or value at which a security or commodity is bought or sold, and it is also used to determine the worth or value of a financial instrument.
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