Question

The prices of several bonds with face values of $1000 are summarized in the following table;

Bond A B C D

Price $974.33 $1039.97 $1146.22 $1000.00

For each bond, state whether it trades at a discount, at per or at a premium.

Answer 1

Bond	Price	Face value	Difference	Traded @
A	$     974.33	$ 1,000.00	$      -25.67	Discount
Bond	$ 1,039.97	$ 1,000.00	$        39.97	Premium
C	$ 1,146.22	$ 1,000.00	$      146.22	Premium
D	$ 1,000.00	$ 1,000.00	$               -	Par

If share traded at Par value the Face value = Price of the Bond

If share traded at Premium face value< Price of Bond

If share traded at Discount face value> Price of Bond