What it is:
How it works/Example:
The market prices of bonds are quoted as a percentage of the bonds' par value. Bonds issued by companies are quoted in increments of 1/8th (0.125) and bonds issued by the government are quoted in increments of 1/32nd (0.03125).
For instance, a corporate bond with a par value of $1000 quoted at 80.125 would have a market value of $1,000 * 0.80125 = $801.25.
Likewise, a government-issued bond with a $1,000 par value quoted at 85.03125 would have a market value of $1,000 * 0.8503125 = $850.3125.