Understanding Bond Valuation: What It Means When a Bond is Trading at Par
In the complex world of finance, bonds serve as a fundamental investment vehicle, offering a predictable income stream and a relatively lower risk profile compared to equities. However, the terminology surrounding bonds can often be confusing, especially for novice investors. One such term that frequently arises in discussions about bond valuation is “trading at par.” In this article, we will delve into what it means for a bond to be trading at par, the implications for investors, and how it fits into the broader context of bond market dynamics.