Average Price
1. Sometimes used in determining a bond's yield to maturity. A bond's average price is calculated by adding its face value to the price paid for it and dividing the sum by two.
2. Average price is also sometimes known as Net Asset Value (NAV) for mutual funds.
Investopedia Commentary
1. Although the average price of a bond is not the most accurate method to find its YTM, it does give investors a rough and simple gauge to find out what a bond is worth.
Related Links
Bond Basics Tutorial
Advanced Bond Concepts
See also: Accrued Interest, Face Value, Mean, Moving Average, NAV, Yield to Maturity