What is a Dollar Price?
The phrase “dollar price” is unique to the bond market. The dollar price of a bond is the price of a particular bond expressed as a percentage of the bond’s face value, also known as a percentage of par. As an example, a dollar price of 95 quoted for a specific bond would mean the seller or issuer of that bond is selling the bond at 95% of its face value, so that a buyer would pay $950 for each $1,000 of the bond’s face value. The yield of a bond is another way of quoting the dollar price. A bond is a certificate denoting money that is essentially loaned to a company, municipality or the federal government by the purchaser of the bond for the amount, the face value, stated on the bond itself. Investors who hold bonds are basically lien-holders or creditors and their purchase of a bond entitles them to no share of ownership or proprietorship in the entity issuing the bond. In contrast, the purchaser of a share of a stock is considered a partial owner of the company issuing the stock. Th
