Skuldabréfaverð

Skuldabréfaverð refers to the market price of a bond. Bonds are debt instruments where an issuer owes the holder a debt and is obliged to pay interest (the coupon) and repay the principal at a later date. The price of a bond is influenced by several factors, primarily market interest rates. When prevailing interest rates rise, the price of existing bonds with lower fixed interest rates typically falls, making them less attractive to investors compared to new bonds offering higher yields. Conversely, when market interest rates fall, existing bonds with higher fixed interest rates become more valuable, and their prices tend to rise. Other factors influencing skuldabréfaverð include the creditworthiness of the issuer, the time remaining until maturity, and overall market sentiment. Bond prices are typically quoted as a percentage of their face value, also known as par value. A bond trading at par value would have a price of 100. A price above 100 indicates the bond is trading at a premium, while a price below 100 means it is trading at a discount. The yield to maturity (YTM) is a crucial metric that reflects the total return anticipated on a bond if it is held until it matures, taking into account its current market price, par value, coupon rate, and time to maturity.