Premium, Discount, and Par

Now that we have calculated Values and Yields for Bonds, we will stop and define three type of bonds. Then match each of the following characteristics to the type of bond below.

1. Discount bonds (Link to Explanation of Discount Bonds)
2. Premium Bonds (Article describing Premium Bonds)
3. Par Value Bonds

	Price above Par Value ($1000)
	Yield to maturity below Coupon Rate
	Low Risk, High Coupons
	Often Investment Grade Bonds
	Price below Par Value ($1000)
	Yield to Maturity > Coupon Rate
	High Risk Bonds
	May have Junk Ratings
	When price=par value and coupon = market interest rates (or yield). This is the case when bonds are issued (when they originate)

A.	Par Value Bond
B.	Premium Bond
C.	Discount Bond