discount bond

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Discount bond

Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.

Discount Bond

A bond or other debt instrument that is issued at a price below its face value. For example, a bond with par of $10,000 might be issued to an investor for $7000. All zero-coupon bonds are discount bonds.

discount bond

A bond selling at a price that is less than its par value. In addition to semiannual interest payments, a discount bond offers investors additional appreciation if the security is held until maturity.