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| Definitions by InvestorWords.com |
| What is...? |
| premium The amount by which a bond or stock sells above its par value. see also current market price. Also, the amount by which a closed-end fund's market price exceeds the value of its holdings. Also, an additional cost above the normal cost. Also, the amount that the buyer of an option pays to the seller. Also, a regular periodic payment for an insurance policy, here also called insurance premium. see also loading. Also, the amount by which the first trading of an IPO exceeds its offering price. opposite of discount. see also risk, risk premium, equity risk premium, conversion premium, deliverable grades, single-premium life insurance, waiver of premium. |
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