By Theorem 1, the yield is equal to the contract rate if and only if the simple price equals the par value. Let us find the relationship between the simple price and the actual market price (invoice or dirty price).
If and only if y = r (or Y = R), the simple price equals the par value by Theorem 1 and the market price is determined by (7): P = ([m.sub.l] + ...
A bond has a coupon rate of l0 percent, a par value of $100, and total of 20 semiannual payments strating with the first payment in 91 days.
If the yield equals the coupon rate, the clean price CP closely approximates the simple price, which in this case equals the par value. The clean price CP of a bond is the market price P minus the accounting accrued interest, defined as:
The Articles formally permitted adjustment of a currency's par value only if the country's balance of payments was in "fundamental disequilibrium." This was an imprecise concept, but it came to mean that exchange rates would be adjusted only as a last resort and only in conjunction with other policies to redress the disequilibrium.
exchange rate policy was the maintenance of a fixed par value of the dollar.
In the discussions of the Committee of Twenty, the par value system still was regarded as the "normal" regime, and "the task of monetary reform was viewed as one of improving the Bretton Woods system so that it would operate without frequent crises, and in a more symmetrical fashion" than previously, "to facilitate the continued expansion of international trade and productive capital flows."(7)