DEFINITION of 'Discount'

The condition of the price of a bond that is lower than par. The discount equals the difference between the price paid for a security and the security's par value.


For example, if a bond with a par value of $1,000 is currently selling for $990 dollars, it is selling at a discount.

  1. Discount Bond

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    A short-term debt obligation backed by the U.S. government with ...
  4. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  5. Original Issue Discount - OID

    The discount from par value at the time that a bond or other ...
  6. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
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