Question

whats a bond

Answer 1

A bond is a fixed income investment in which investors lend money to the borrower in return of fixed interest payments over the tenure of loan and and face value at the maturity date. The value of a bond depends on Coupon rate and market interest rates.

If Coupon Rate is equal to Yield to maturity bonds market value is equal to par value

If Coupon Rate is more than Yield to maturity bonds market value is more than par value(Premium)

If Coupon Rate is less than Yield to maturity bonds market value is less than par value(Discount)