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discount

discount definition - finance

A term with many uses. Often discount refers to the difference between a bondÂ’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.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.