Discount: Difference between revisions
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# ''Noun.'' In relation to a discount instrument, the difference between the current market price and the redemption amount. | |||
# A coupon bond trading in the market ''at a discount'' has a market value less than its par value. | |||
# A foreign currency trading ''at a discount'' in the forward foreign exchange market is weaker in the forward market than in the spot market. | |||
# ''Verb.'' In relation to a money amount, make smaller. For example, to discount back a future cashflow to a (smaller) present value. | |||
# ''Verb.'' In relation to financial instruments, to exchange an instrument with a future maturity date, for a 'discounted' market value today. Today's market value being smaller than the redemption amount (receivable at maturity) by the amount of the discount. | |||
== See also == | == See also == | ||
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* [[Premium]] | * [[Premium]] | ||
* [[Spot market]] | * [[Spot market]] | ||
Revision as of 20:21, 11 August 2013
- Noun. In relation to a discount instrument, the difference between the current market price and the redemption amount.
- A coupon bond trading in the market at a discount has a market value less than its par value.
- A foreign currency trading at a discount in the forward foreign exchange market is weaker in the forward market than in the spot market.
- Verb. In relation to a money amount, make smaller. For example, to discount back a future cashflow to a (smaller) present value.
- Verb. In relation to financial instruments, to exchange an instrument with a future maturity date, for a 'discounted' market value today. Today's market value being smaller than the redemption amount (receivable at maturity) by the amount of the discount.
