Discount: Difference between revisions
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* [[Discount rate]] | * [[Discount rate]] | ||
* [[Discounted cash flow]] | * [[Discounted cash flow]] | ||
* [[Early bird rate]] | |||
* [[Premium]] | * [[Premium]] | ||
* [[Spot market]] | * [[Spot market]] | ||
Revision as of 10:22, 12 February 2022
1. Discount instruments - noun.
In relation to a discount instrument, the discount is the difference between the current market price and the redemption amount.
2. Bonds.
A coupon-paying bond trading in the market at a discount has a market value less than its par value.
3. Foreign currency - forward market.
A currency trading at a discount in the forward foreign exchange market is weaker in the forward market than in the spot market.
4. Verb - financial instruments.
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.
5. Verb - discounted cash flow.
In relation to a money amount, to discount is to make smaller.
For example, to discount back a future cashflow to a (smaller) present value in discounted cash flow (DCF) analysis.
