Economics Bonds Questions
The face value of a bond refers to the amount that the bond will be worth at its maturity date. It is the amount that the issuer of the bond promises to repay to the bondholder. On the other hand, the market value of a bond is the current price at which the bond can be bought or sold in the market. The market value of a bond can fluctuate based on various factors such as changes in interest rates, creditworthiness of the issuer, and overall market conditions. Therefore, the difference between a bond's face value and its market value represents the potential gain or loss that an investor may experience if they were to buy or sell the bond before its maturity date.