Discount Interest

Definition:

Interest at a beginning of the loan. For example if you take out a one-year loan of $100 at a discount interest rate of 10%, you would receive $90 at the outset.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Trade on top of

Trade at a narrow speed or no spread in basis points relative to some other bond yield, usually Treasury bonds.

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