Issue price
from class: Math for Non-Math Majors Definition Issue price is the original price at which a security, such as a bond or stock, is offered to investors. It serves as the baseline value from which future market prices and yields are measured.
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Predict what's on your test 5 Must Know Facts For Your Next Test The issue price is set by the issuer and agreed upon by underwriters before public offering. It can be influenced by factors such as market conditions, interest rates, and investor demand. For bonds, the issue price may be above (premium), below (discount), or equal to (par) the face value. Investors compare the issue price with current market prices to evaluate potential gains or losses. The difference between issue price and face value affects yield calculations for fixed-income securities. Review Questions What factors influence the setting of an issue price? How does the issue price of a bond differ when issued at a premium compared to a discount? Why is understanding the issue price important for evaluating investment opportunities?
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