Asked by Deniza Marcinkevica on May 21, 2024
Verified
Is a bond quoted at 90 selling at a premium or a discount?
Premium
Fee for insurance coverage, usually paid every year by the insured person. The difference between a bond’s par value and its market value when the market value is more. When bonds are sold at a premium, the yield rate will be lower than the stated (face) rate.
Discount
A fee charged when someone buys a note before maturity. With regard to bonds, a bond sells at a discount if the market value becomes less than the face value.
- Determine the concept of buying bonds at a premium or a discount.
Verified Answer
AN
Learning Objectives
- Determine the concept of buying bonds at a premium or a discount.