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LeoGlossary: Bond Price
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A bond’s price is the amount of money paid to buy the bond, either when the bond is originally issued or sold later on the secondary market. Depending on how a bond’s coupon rate, or the interest it pays to investors, compares to current market interest rates, the bond’s price may be higher or lower than its par value. For example, if current interest rates are 3 percent, a $5,000 bond with 10 years to maturity and a 2.5 percent coupon may sell for $4,785.
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