Asked by Mobolaji Ajewole on Jun 10, 2024
Verified
A bond with a par value of $1,000 trading at 101 ½ sells for a premium.
Par Value
The face value of a bond or stock as stated by the issuing company, unrelated to market value.
Premium
An amount paid in excess of the nominal or face value, often in relation to insurance or bonds.
- Distinguish between the market value and par value of bonds.
Verified Answer
AB
Arnoldo BarredaJun 11, 2024
Final Answer :
True
Explanation :
A bond trading at 101 ½ is selling above its par value of $1,000, indicating it is selling for a premium.
Learning Objectives
- Distinguish between the market value and par value of bonds.