Definitions for "PARITY PRICE"
Keywords:  bushel, bale, commodity, bullet, pegged
Price per bushel, pound or bale that would be necessary today to buy the same quantity of goods (from a standard list) that a bushel would have bought in the 1910-1914 base period at the price then prevailing.
A price for a commodity that is pegged to another price or a composite of prices based on a given prior period.
The price at which the yield-to-maturity of a security equals its coupon rate. In contrast to bullet pay securities, such as Treasury securities for which parity occurs at par at its coupon payment date, parity for mortgage securities is achieved slightly below par. This occurs because there is a delay in the receipt of the first initial payment to investors. At its parity price, changes in the prepayment rate of a mortgage security do not affect its yield.