Can a debt be sold for less then its principal value?
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rudiger
Apprentice
Joined: 02 Apr 2005
Posts: 3
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 Posted: 05/12/08 - 06:41 Post subject: |
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| Hi there everybody! I was wondering if you could explain those financial instruments with which you are buying and selling debts. I was always interested in them, but I never understood how they work. Can a debt be sold for less then its principal value? Thank you in advance for your posts. |
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cecilio
Apprentice
Joined: 25 Aug 2006
Posts: 14
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| Posted: 06/11/08 - 00:29 Post subject: |
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| Hello there. Well, I am not quite an expert about all those financial instruments (after all, there are so many of them these days) but I think that I can answer to your question. Unfortunately, I cannot recall its name but I do think that, once the security is created (or issued) it acts as any other security. It means that the market determines its price. So, if you look that way, a debt can indeed be sold for less then its principal value. Now, if you need some more information, I am sure that someone else can post something more about it. I am sorry if I wasn’t of much help. Take care! |
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