Accrued Market Discount

外汇网2021-06-19 20:54:55 119

The gain in the value of a discount bond expected from holding it for any duration until its maturity.

|||As discount bonds are sold below face value, it is expected that they will gradually rise in market price until reaching maturity.

For example, let's say someone purchases a discount bond with a par value of $1000 for $700. By holding the bond, they can expect a maximum gain of $300. Any appciation above the $700 paid is called the accrued market discount.

This rise in price is different than that which occurs in regular coupon bonds as a result of lowering interest rates.

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Accrued Market Discount

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