SHORT ANSWER
The core idea
Price discovery is the process through which buyers and sellers incorporate new information into executable market prices.
THE MECHANISM
What is happening underneath
In bonds it can occur across cash securities, futures, swaps, ETFs and dealer quotations.
MARKET INTERPRETATION
How investors should read it
During stress, the most liquid instrument may reveal a new market price before less frequently traded bonds do.
BONDSTATS TAKEAWAY
The same market move can carry different information depending on which maturity, issuer and risk premium is changing. Read the question together with the underlying concepts rather than treating one price move as a universal signal.
RELATED CONCEPTS
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