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Discounted Bill

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Discounted Bill
A debt security issued at a discount to its face value. For example, if a discounted bill has a face value of $1,000, it may be issued to the holder at $900. When it matures, the holder receives the full $1,000. A discounted bill, especially a short-term issue, often does not pay a coupon; rather, the difference between the discount and the face value takes the place of the coupon. See also: Coupon-equivalent yield.


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Like conventional banks, it took deposits, made loans, and discounted bills of exchange.
In addition to cash drain induced by bank failures, another good example of this is from the first year of the Great Depression (August 1929-September 1930): the MB fell by over $300 million due mainly to a decline in bank borrowing via discounted bills (F&S 1963, 340-341).
The financing includes before and after shipping facilities, loans against trust receipts, discounted bills, payments for receivable amounts and discounted export bills.
 
 
 
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