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Discount yield |
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Discount yieldThe yield or annual interest rate on a security sold to an investor at a discount. A bond that is sold at $4875 that matures to $5000 has a discount of $125. To calculate the discount yield: (discount divided by the face value of the security) multiplied by the (number of days in the year divided by the number of days to maturity).Discount yieldThe yield on a security purchased at a price below its face value.Similar MatchesDiscount ArbitrageDiscount ArbitrageA riskless arbitrage in which a discount option is purchased and an opposite position is taken in the underlying security. The arbitrageur may either buy a call at a discount and simultaneously sell the underlying security (basic call arbitrage) or maybuy a put at a discount and simultaneously buy the underlying security (basic put arbitrage). See also Discount. Straight DiscountStraight DiscountThe rate applied to the face value of the promissory note to calculate present value without compounding. For example, a note with a face value in three years of 100, with a straight discount of 10% per annum has a present value of 70. Discounted dividend model (DDM)Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the present value of all expected future dividends. Discount factorDiscount factorPresent value of $1 received at a stated future date. Deep discount bondDeep discount bondA bond issued with a very low coupon or no coupon that sell at a price far below par value. A bond that has no coupon is called a zero-coupon bond. Further Suggestionsdiscounted cashflowDiscount bond discount rate discounted rate mortgage Discounted in or by market discount Stepped discount mortgage Original Issue Discount securities (OIDS) Accretion (of a discount) Unamortized bond discount Discount Points Documented discount notes Discount window Discount period Volume discount Original issue discount debt (OID debt) Dividend Discount Return deep discount Discounted payback Dividend Discount Model (DDM) Discounted payback period rule Discounting Discount broker Forward discount Discount rate |
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