Bank-Discount Basis

0.01 sec.

Discount Yield

A way to quote the price for bonds. It is calculated as the annualized yield assuming a 360 day year. One calculates the discount yield thusly:

Discount yield = (Discount from par value / par value) * (360 / Days until maturity)

The discount yield is also called the discount basis or the bank-discount basis.

bank-discount basis

A method of calculating the quoted yield on a debt security. In a bank-discount basis calculation, the amount of discount from face value is divided by the security's face value and the result is annualized. For example, a $10,000 face-amount bond due in two months and selling for $9,900 would be quoted at ( ^$100/_$10,000 ) ( ³⁶⁰/₆₀ ), or 6%. While this is a common way of quoting yields on certain securities such as Treasury bills and commercial paper, it actually understates the effective rate paid. Also called discount basis, discount yield. See also equivalent bond yield.

Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content.

?Page tools

Printer friendly
Cite / link

Feedback
Add definition

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Bank Discount Basis Coupon-Equivalent Rate Discount Basis discount security Discount Yield Equivalent Bond Yield Treasury Bill			1 High bill rate at auction, issue date within period, bank-discount basis. Interest rates and bond yields by Economic Indicators 1) High bill rate at auction, issue date within period, bank-discount basis. Interest rates and bond yields by Economic Indicators 1) High bill rate at auction, issue date within period, bank-discount basis. Interest rates and bond yields by Economic Indicators			Bank of Canada Bank of Central African States Bank of Credit and Commerce International Bank of Documentary Credit Insurance Bank of England Bank of First Deposit Bank of Japan Bank of New York Bank of Scotland bank partitions bank rate Bank Rate Monitor Index Bank Rating Bank Reconciliation Bank Reconciliation Statement Bank Regulation Bank Release Bank Restriction Act of 1797 Bank Run Bank Secrecy Act Bank Swap Bank Trust Custodial Account Bank Trust Department Bank Wire Bank-Based Corporate Governance System Bank-Discount Basis Bank-Grade Banker Banker's Acceptance Banker's Bank Banker's Reference Bankers Acceptance Bankers Blanket Bond Bankier Banking Banking (Special Provisions) Act 2008 Banking Act of 1933 Banking Acts of 1979 and 1987 Banking and Securities Industry Committee Banking Books Banking Delay Banking Department Banking Directives Banking Ombudsman Banking Power Bankkonto Bankline Bankmail bankruptcy Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Bankruptcy and Insolvency Act			Bank Transformation Toolkit Bank Trust Custodial Account Bank Trust Custodial Accounts Bank trust department Bank Trust Departments Bank TuranAlem bank up bank up bank vault bank vault Bank von Ernst Bank War Bank West Financial Corporation Bank wire Bank Wire Transfer of Funds Bank Wire Transfer of Funds Against Dividend Allocation Credit Bank Wires bank withdrawal bank yards Bank, Province, Branch Bank, State & Branch Code Bank-Americard Service Exchange bank-and-turn indicator bank-and-wiper switch Bank-based corporate governance system bank-depositor relation Bank-Discount Basis bank-grade bank-inset reef Bank-Netherlands Partnership Program Bank-Netherlands Water Partnership Bank-Netherlands Water Partnership Program Bank-note detector Bank-Owned Life Insurance bank-run gravel bank-run gravel Bank-sided Banka Banka Banka e Re e Kosoves Banka Kombëtare Tregtare Banka Private e Biznesit Banka Qendrore e Republikës së Kosovës Banka Ve Sigorta Muameleleri Vergisi bankability bankable Bankable Feasibility Study Bankacýlýk Düzenleme Ve Denetleme Kurumu Bankalararasý Kart Merkezi Bankamerica Bankamerica BankAmerica Corp. BankAmerica Corp. Bankamerica Corporation Bankamerica Corporation Bankart lesion

Financial Dictionary

Free Tools:	For surfers: Free toolbar & extensions \| Word of the Day \| Help For webmasters: Free content \| Linking \| Lookup box \| Double-click lookup

Disclaimer
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.