PRICE

The sum or amount of money or its equivalent for which anything is bought, sold, or offered for sale. It is the valuation of goods or services in monetary units or in another exchange instrument. A price may be fixed freely by the market depending on supply and the demand, or it can be fixed by authorities in which case it would be a controlled price. prices reflect an exchange relationship between goods and services available in the market.

Price is the result of supply and demand and it shows the different strengths that interact in a financial asset. There are the following types of meanings in finance:

– Issue price: effective price of each security at the moment of its issuance. It is normally at par or it´s the nominal price, although it may be issued at an inferior price (discount) or superior (premium).

– Redemption price: price at which the issuer returns the capital at the security´s amortization. It is usually at par on the due date.

– Dirty price: it is the amount that must be paid when purchasing a bond (it includes the discount coupon or accrued).

– Clean price: it is the dirty price minus the accrued coupon. It is usually the price used in the markets.