discount investment & finance definition
term with many uses. Often discount refers to the difference between a bond’s
face value and its current market value. A discount occurs when the bond is
selling at a price less than its face value. Treasury bills are sold at a
discount to their face value. On maturity, the investor gets the full face
value returned. Discount also may refer to a price that is lower than it
ordinarily would have been if circumstances were different.
See discount in Wall Street Words
- To adjust the value of an asset on the basis of information rather than activity or events. For example, investors may already have discounted a firm's stock price because of the anticipation of weak earnings.
- To deduct the charge for making a loan from the loan's principal before distributing funds to the borrower.
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