Bond prices are largely determined by relationship of their coupon rate to the going market rate and the number of years until maturity
• If the market rate for the bond exceeds the coupon rate, the bond will sell below par value. If the market rate is less than the coupon rate, the bond will sell above par value.
• The more distant the maturity date of a bond, the farther below or above par value the price will be given the coupon rate and market rate relationship.
• Economic environment policy
What are the determinants of the price of a bond?
