To deduct from an account, debt, charge, and the like; to make an abatement of; as, merchants sometimes discount five or six per cent for prompt payment of bills
To lend money upon, deducting the discount or allowance for interest; as, the banks discount notes and bills of exchange
The amount by which a preferred stock or bond may sell below its par value Also used as a verb to mean "takes into account" as the price of the stock has discounted the expected dividend cut
the act of reducing the selling price of merchandise give a reduction in price on; "I never discount these books-they sell like hot cakes
To take into consideration beforehand; to anticipate and form conclusions concerning (an event)
When the market price of a closed-end fund is less than its underlying net asset value (NAV), it is said to be trading at a discount That discount allows you to buy a dollar's worth of securities for less than a dollar So if a closed-end fund trading at a 10% discount owns a portfolio of stocks collectively worth $10 a share, you can buy that portfolio for $9 a share Unlike open-end funds, closed-ends trade like stocks on an exchange so a fund's price is determined by investor demand for its shares A lack of demand can cause the fund's market price to be less than its underlying portfolio value--the source of the discount See "Closed or Open End " BACK TO TOP
in loan originations, a discount refers to an amount withheld from loan proceeds by a lender Generally the purpose of a discount is to adjust the yield upward, either in lieu of interest or in addition to interest The rate or amount of discount depends on money market conditions, the credit of the borrower, and the rate or terms of the note One discount is equal to 1% of the loan amount