The market value (issue price) of a bond is equal to the present value of all future cash payments provided by the bond.

Question

Quizplus · Accepted Answer

The market value of a bond is based on the present value of all future cash payments, including coupon payments and the principal repayment at maturity. This is because investors are willing to pay for the expected cash flows of a bond in today's dollars, taking into account the prevailing interest rates and credit risk.

The Market Value (Issue Price) of a Bond Is Equal