What is a bond’s par value?
“Par value” is the face value of a bond.
The bonds that we are looking at typically have a par value of $1,000. This means that if you own one of these bonds, the company owes you $1,000. Furthermore, a bond with a par value of $1,000 and a coupon rate of 4% will have annual coupon payments of $40.
A bond that is trading above par is said to be trading at a premium, while a bond trading below par is regarded as trading at a discounted rate.
You can learn more about the basics of bond trading in Zach’s full report by clicking here.
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