The price at which a dealer will purchase a bond is called the _____ price.

Question

Quizplus · Accepted Answer

The price at which a dealer is willing to buy a bond is called the bid price. This is the price at which an investor can sell the bond to the dealer. The asked price, on the other hand, is the price at which the dealer is willing to sell the bond to an investor. The face value of a bond is the value of the bond at maturity, while a call option gives the issuer the right to buy back a bond at a specified price, and a put option gives the investor the right to sell the bond back to the issuer at a specified price.

The Price at Which a Dealer Will Purchase a Bond