Accretion of Discount

(redirected from Accrued Market Discounts)

Accretion of Discount

The increase in value of a security or other instrument as it approaches maturity. For example, suppose one buys a bond with a face value of $100 and pays $89. Because one is guaranteed to receive $100 when the bond matures, its value gradually increases between the purchase date and maturity. This increase is called the accretion of discount.
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