Investor Glossary-discountInvestor Glossary-discountInvestor Glossary-discountInvestor Glossary-discountInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Discount

The HTML to link to this page
 

A discount is a difference between the price paid for an asset and the specified list price of a good or face value of an instrument. For instance, a bank holding a defaulted mortgage may settle the obligation at a significant discount by accepting less than the principal owed from an investor who is buying the property. The discount may be acceptable to the bank when it avoids the legal expenses and time that would be involved in foreclosure proceedings. This particular type of discount is often called a haircut. A bond is said to trade at a discount to its face value at maturity, and in this context, the discount rate is the interest rate used to determine the present value of future cash flows. The word discount can be used not only as a noun, but also as a verb. A seller is said to discount an asset by lowering the price.



Rate this discount definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use