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Discount Note

Discount Note Definition

Is a short-term debt security that is issued at a discount to its face value. Discount notes do not pay interest, the security is matured at a par value above the purchase price. The investment's yield is incorporated in the price difference. If a discount note has a face value of $100, it may be issued at $95 and the holder receives the full $100 at maturity.


Additional meaning of Discount Note:

Discount notes are usually issued by governments or highly rated corporate borrowers.


RELATED TERMS
Face value
Par value




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