BOND DISCOUNTS AND PREMIUMS

You wish to purchase bonds on the secondary market, but you do not know what to make of the different prices that you see.  Why do some bonds sell at 95 and others at 110?  In this tutorial, we will help you understand what bond premiums and discounts are, why they exist, how to take advantage of them, and how to determine whether they meet your objectives.

Bond Basics What Are Bond Premiums and Discounts? What Factors Affect Bond Prices? A Unique Discount Bond Special Tax Consequences of Discount and Premium Bonds Bonds May Sell for More or Less Than Their Face Values

Let's begin by first learning about some characteristics of bonds.