DEFINITION of 'Risk Discount'
A situation where a particular investor, either an individual or firm, decides to receive less of a return on their investment in exchange for less risk. The risk discount is the exact opposite of the risk premium, and the degree to which any one person chooses the amount of the discount will vary by person to person.
BREAKING DOWN 'Risk Discount'
The degree to which someone chooses to exchange return for risk will depend on their individual risk tolerance. Those who choose to take a risk discount versus a risk premium are people who are very risk adverse.
For example, an investor who decides to take the risk discount may choose to purchase a highgrade corporate bond with a yield to maturity (YTM) of 5%, while an equivalent bond from another firm has a YTM of 5.25%. This investor may perceive the lower yielding bond as a safer investment, and choose to take the risk discount.

Discount
The condition of the price of a bond that is lower than par, ... 
Discounting
The process of determining the present value of a payment or ... 
Discount Yield
Discount yield is a measure of a bond's percentage return. Discount ... 
Discount Note
A shortterm debt obligation issued at a discount to par. Discount ... 
Market Discount
The difference between a bond's stated redemption price and its ... 
Discount Rate
The interest rate charged to commercial banks and other depository ...

A Guide on the RiskAdjusted Discount Rate
When a project or investment faces higher amounts of risk or uncertainty, it may be appropriate to utilize the riskadjusted discount rate. 
Investing
Finding A Discount On Your Next Bond Investment
Discount rates have nothing to do with buying things on sale. Rather, it helps you figure out how much to pay today for a bond or cash flow in the future. 
Investing
Discounting With The Discount Rate
The discount rate is the interest rate you need to earn on a given amount of money today to end up with a given amount of money in the future. Let's say you need $1,000 one year from now to go ... 
Investing
Understanding Bond Prices and Yields
Understanding this relationship can help an investor in any market. 
Investing
Bond Yields: Current Yield And YTM
A bond's current yield, also called "bond yield," is the interest it pays annually divided by the bond's price. A stock's current yield, also called "dividend yield," is the sum of its annual ... 
Investing
Understanding Risk Tolerance
Risk tolerance measures the degree to which an investor will accept risk in exchange for a better return. 
Investing
Matching Investing Risk Tolerance To Personality
Understanding risk tolerance is crucial to the advisor/client relationship and any good investment policy statement. 
Retirement
Benefit From Senior Discounts
With social security payment projections almost flat for next year, seniors can turn to discounts to save money. 
Insurance
Get Sale Prices On Healthcare With Discount Plans
Medical discount plans can help the uninsured or underinsured afford better healthcare.

What is the difference between yield to maturity and the spot rate?
Find out how yield to maturity and spot rate calculations use different discount rates to determine the present market value ... Read Answer >> 
All of the following are true concerning the YieldtoMaturity (YTM) of a bond EXCEPT ...
The correct answer is d): YTM is the promised rate of return an investor will receive from a bond at the current market price ... Read Answer >> 
What is the difference between the cost of capital and the discount rate?
Learn about the differences between the cost of capital and the discount rate as they relate to estimating a required return ... Read Answer >> 
How do I find out my own risk tolerance?
Learn why risking capital can be risky business, how much risk can you afford and how to determine the right amount of risk ... Read Answer >> 
The risk an investor is most likely to face when investing in a discounted U.S. Treasury ...
a. Call risk b. Reinvestment risk c. Credit risk d. Purchasing power risk Answer: Bbecause call risk would apply more often ... Read Answer >>