Rule 20 of 32 in this unit2.1.2
2.1.2 Debt Instruments
SIE outline 2.1.2
Par Is the Pivot
A price is a percentage of face value. Par itself is a hundred. Below that is a discount, above it a premium. NOT dollars until you multiply.
The trick
Common trap: Learn the discount order and apply it. Correct: Ask whether par is above or below your price. Derive the order, never recall it.
The method for this kind of question
- Yield is tested in two sections
Now answer
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