Thursday, March 2, 2017

discount factor curve - How is the price of a bond actually determined?


How the price of a bond is actually determined? Is it the supply-demand that determines the price first and then the YTM is calculated on the back of this for that bond. Or is it that the changes to interest rate curve comes first and then the bond is priced using the typical discounting method and that becomes the price in stock market?




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