Discount

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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.

INVESTOPEDIA EXPLAINS 'Discount'

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

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  3. What is the effective interest method of amortization?

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  5. What type of asset allocation should I use if I am already retired?

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  6. What happens to the price of a premium bond as it approaches maturity?

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