Extended data:
The bond price refers to the price when the bond is issued. Theoretically, the face value of a bond is its price. But in fact, due to various considerations of issuers or changes in supply and demand of capital markets and interest rates, the market price of bonds often deviates from its face value, sometimes higher than the face value, and sometimes lower than the face value. In other words, the face value of a bond is fixed, but its price is constantly changing. The issuer pays interest and principal according to the face value of the bond rather than the price. Bond prices are mainly divided into issue price and transaction price.
The calculation formula of bond investment yield is r = [m (1+r× n)-p]/(p× n).
The formula for calculating the available bond price p is p = m (1+r× n)/(1+r× n).
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Where m and n are constants. Then the main factors that affect the bond price are the waiting period, coupon rate and the yield at the time of transfer.
influencing factor
1. repayment period. The shorter the waiting period, the closer the bond price is to its final value (exchange price) M( 1+rN), so the longer the waiting period, the lower the bond price. In addition, the longer the repayment period, the greater the risk that the bond issuing enterprise bears, so the lower the bond price.
2. coupon rate. The coupon rate of a bond is also the nominal interest rate of the bond. The higher the nominal interest rate of bonds, the greater the maturity income, so the higher the price of bonds.
3. Investors' profit expectations. The profit expectation (return on investment R) of bond investors changes with the change of market interest rate. If the market interest rate is high, the investor's profit expectation R will also rise and the bond price will fall. If the market interest rate falls, the bond price will rise. This is most obvious when bonds are issued.
Generally speaking, there are intervals between the printing and issuance of bonds. If the market interest rate changes at this time, that is, the nominal interest rate of bonds will be different from the actual interest rate of the market. At this time, the printed coupon interest cannot be readjusted. In order to make the bond interest rate consistent with the current market interest rate, it is only a bond premium or discount.
4. The reputation of the enterprise. If the issuer's credit degree is high, the risk of its bonds is small, so its price is high; And if the credit rating is low, the bond price will be low. Therefore, in the bond market, for other bonds with the same conditions, the price of government bonds is generally higher than that of financial bonds, and the price of financial bonds is generally higher than that of corporate bonds.
5. Supply and demand. The market price of bonds also depends on the relationship between capital and bond supply. When the economic development is on the rise, enterprises generally need to increase investment in equipment, so on the one hand, they will throw out bonds because they are in urgent need of funds, on the other hand, they will borrow money from financial institutions or issue corporate bonds, which will tighten the market funds and increase the supply of bonds, thus leading to a decline in bond prices. However, when the economy is depressed, the demand for capital of production enterprises will drop, and financial institutions will have excess funds due to the reduction of loans, thus increasing investment in bonds and leading to an increase in bond prices. When the central bank, the financial department and the foreign exchange management department carry out macro-control on the economy, it will often cause changes in the supply of market funds, which are generally reflected in the changes in interest rates and exchange rates, thus causing the rise and fall of bond prices.
6. Price fluctuation. When the price rises at a brisk pace or the inflation rate is high, in order to preserve the value, people will generally invest their funds in real estate, gold, foreign exchange and other fields that can preserve the value, resulting in a shortage of funds and a decline in bond prices.
7. Political factors. Politics is a concentrated reflection of economy, which reacts on economic development. When people think that the change of political form will affect economic development, such as the change of government, the national economic policy and planning will change greatly, thus prompting bondholders to formulate trading policies.
8. Speculative factors. In bond trading, people always try their best to earn the difference. Some powerful institutions will use their funds or bonds for technical operations, such as raising or lowering bond prices, which will cause changes in bond prices.