Definition: A discount bond is a bond bought at a discount, or a price less than, its face value. The face value is the amount of money the holder of the bond receives at the expiry date of the bond. Unlike coupon bonds, discount bonds only pay the bearer once, when the bond expires.
Terms related to Discount Bonds:
About.Com Resources on Discount Bonds:- Economics - The Dividend Tax Cut and Discount Bonds
- Investing for Beginners - Discount Bonds and Zero Coupon Bonds
Books on Discount Bonds:
- An examination and comparison of the discount on closed-end bond and stock funds - Lisa Anne Harkleroad, Thesis, 1991.
- Increasing Spot Rates of Interest: Structure of the Price of Default Free Discount Bond - Salvador Cruz Rambaud, International Journal of Theoretical and Applied Finance v5, n3 (May 2002): 321-32.
- Pricing and Hedging Discount Bond Options in the Presence of Model Risk - F.S. Lhabitant, European Finance Review v4, n1 (2000): 69-90.
- A Note on Finance Principles, Bond Valuation, and the Appropriate Discount Rate - Steven P. Rich, Financial Practice and Education v1, n2 (Fall-Winter 1991): 99-101.
