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14 December, 07:57

A bond traded at 102½ means that: Multiple Choice The bond pays 2.5% interest. The bond traded at 102.5% of its par value. The market rate of interest is 2.5%. The bonds were retired at $1,025 each. The market rate of interest is 2½% above the contract rate.

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  1. 14 December, 10:39
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    A bond traded at 102½ means that the bond traded at 102.5% of its per value.

    Explanation:

    Par value of a bond is the face value of that bond.

    It is important for a bond or fixed-income instrument because it is used to determine the maturity value as well as the dollar value of coupon payments.

    The market price of a bond may be above or below par, depending on factors affecting the bond; Factors such as the level of interest rates and the bond's credit status.
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