Fixed IncomeUncorrelated Exposure Yield to Maturity (YTM) Option-Adjusted Spread Bond Long-Term IOU Note Par
Discount Bond
A bond that is sold at a price lower than its face value is known as a discount bond. This typically occurs when the market interest rate is higher than the bond's coupon rate, making it less attractive to investors. Discount bonds can offer potential gains through capital appreciation if the bond's market value increases over time. However, they also carry the risk of a potential loss if the bond is sold before maturity. Therefore, it's important for investors to carefully consider the potential risks and rewards before investing in discount bonds.
Related terms
Understand the meaning and definition of Uncorrelated Exposure in the context of stock market, trading, and investments.
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MOREUnderstand the meaning and definition of Option-Adjusted Spread in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Bond Long-Term IOU in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Note in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Par in the context of stock market, trading, and investments.
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