Market Discount

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Dictionary Says

Definition of 'Market Discount'

The difference between the face value of a bond issued at par and the current below-par market price, plus any original issue discount. Market discounts occur when interest rates rise, thus causing bond prices in the secondary market to fall.
Investopedia Says

Investopedia explains 'Market Discount'

Market discount is not a set amount, but will vary from one bond to another according to market conditions. A bond sold for $1,000 will have a market discount when the yield on the bond rises and its value drops below $1,000.

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