Treasury Market Value Definition

Treasury market value refers to the market value of government-issued treasury bonds. The market value of the bonds is the price they are worth in today's market. The market value is determined by several factors.

Terms

All bonds come with a stated par value, usually $1,000. The bonds also come with a stated rate of interest. This interest rate is used in calculating the semi-annual interest payments that bondholders receive. Bonds also come with a maturity date listed on them. This date is when the bond is fully matured and is worth its face or par value.

Current Yield

Investors buy treasury bonds because they offer minimal risk and are very liquid; people always want to purchase them. The current, or market, value of a bond is determined by several factors, including the bond's coupon rate, or stated rate, and the current price of the bond in relation to its par value.

Prices

Treasury bonds are purchased either for face value, at a discount or for a premium. The price of bonds is closely related to interest rates in the economy. When interest rates are high, the market value of bonds is lower. When interest rates are low, the market value of bonds is higher.

References

• Investing in Bonds: Risks of Investing in Bonds
• Stock Market Investors: Bond Definition and Concepts