What is the difference between a pure discount bond and a bond that trades at a discount?
Give me an example.
When a bond is said to be a discount bond, this means that its current price is less than the par value.
For example, if a bond matures in 2 years and when it matures it pays the investors $100, and this only is currently selling for $99, then it is a discount bond.
A bond trading at discount means that its ...
This solution explains the difference between a pure discount bond and a bond that trades at a discount