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Why would an investor pay more than the face value amount for a bond?


Why would an investor pay more than the face value amount for a bond?

Possibly because the going rate is lower than the interest on the bond.

Say a $100 bond with an interest of 9%. Currently, at a bank the rate is only ~3.5%. Therefore, you would make more money with the bond vs the bank rate.

Generally, bonds are safer investments than the stock market but not as safe as a savings account/cd with a bank. You get paid based upon the risk.

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