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Apr 18, 2022 · A deep-discount bond is a bond that sells at a significantly lesser value than its par value. In particular, these bonds sell at a discount of 20% or more to par and has a...
Jun 17, 2024 · A bond is considered a deep-discount bond if it is sold at a significantly lower price than par value, usually at 20% or more. A discount bond is contrasted with a bond...
Definition: Bonds sold at a substantial discount to their face value, typically due to changes in interest rates or credit risk perceptions. Example : A $1,000 face value bond selling for $700 represents a deep discount, reflecting market concerns or adjustments in bond pricing.
A deep-discount bond is a subcategory of bonds sold for much lower than its face, or par, value. A deep-discount bond means a promise by the bond’s issuer to pay the bondholder on the maturity date an amount greater than the amount originally received.
- Prachi Sinha
Deep discount bonds are bonds sold at a significantly lower price than their face value, often below 80% of par. They offer higher returns through capital appreciation rather than interest income.
May 23, 2024 · Understanding the nuances of deep discount bonds is crucial for informed investment decisions. This article delves into various types of these bonds, explores valuation techniques, and provides insights on market trends, risk management, and strategic portfolio inclusion.
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Jun 1, 2021 · What is a Deep Discount Bond? A deep discount bond is a bond that sells at a price which is 20% or more below the face value of the bond, and carries a low rate of interest during the term of the bond.
