if a bond sells at 102.5, what does that mean?

When a bond sells at 102.5, it means that the bond is trading at 102.5% of its face value, or par value. Par value refers to the nominal value of a bond, typically set at $1,000 for corporate bonds and $100 for government bonds.

To understand what this means in monetary terms, you can calculate the actual price of the bond.

First, convert the percentage to decimal form by dividing it by 100:
102.5 / 100 = 1.025

Next, multiply the par value of the bond by the decimal value:
$1,000 * 1.025 = $1,025

Therefore, a bond selling at 102.5 is priced at $1,025.