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Bond Discount

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Bond discount
The difference by which a bond's market price is lower than its face value. The antithesis of a bond premium, which prevails when the market price of a bond is higher than its face value. See: Original issue discount.

Bond Discount
A situation in which a bond's market value is lower than its face value. Short-term bonds are often issued at a bond discount, especially if they are zero-coupon bonds. However, bonds on the secondary market may trade at a bond discount, which occurs when supply exceeds demand. A bond discount is likely when the issuer has poor or recently downgraded credit, or when current interest rates are higher than the bond's. See also: Unamortized bond discount.

bond discount


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In fact, Florida law in this area may be at odds with prudent investor rule obligations imposed on trustees,4 and the described lack of authority for bond discount accretion and prohibition on bond premium amortization should be considered by trustees in determining whether to utilize a power to adjust ([section]738.
He said those in Congress who believe that granting a temporary two-year corporate bond discount favor to defined benefit plan sponsors will create pressure for the needed comprehensive reform of the pension system "have got it backwards.
Exhibit 5: Amortization of Bond Discount Using the Interest Method * $400,000 of 9%, five-year bonds (semi-annual interest payments) sold to yield 10% at January 1, 2001.
 
 
 
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