Discount: Difference between revisions
imported>Doug Williamson (Layout.) |
imported>Doug Williamson (Layout.) |
||
| Line 1: | Line 1: | ||
1. | |||
''Noun.'' | |||
In relation to a discount instrument, the difference between the current market price and the redemption amount. | |||
2. | |||
A coupon bond trading in the market ''at a discount'' has a market value less than its par value. | |||
3. | |||
A foreign currency trading ''at a discount'' in the forward foreign exchange market is weaker in the forward market than in the spot market. | |||
4. | |||
''Verb.'' | |||
In relation to a money amount, make smaller. For example, to discount back a future cashflow to a (smaller) present value. | |||
5. | |||
''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. | |||
Revision as of 14:21, 13 May 2016
1.
Noun.
In relation to a discount instrument, the difference between the current market price and the redemption amount.
2.
A coupon bond trading in the market at a discount has a market value less than its par value.
3.
A foreign currency trading at a discount in the forward foreign exchange market is weaker in the forward market than in the spot market.
4.
Verb.
In relation to a money amount, make smaller. For example, to discount back a future cashflow to a (smaller) present value.
5.
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.
