Accrued Market Discount
As discount bonds are sold below face value, it is expected that they will gradually rise in market price until reaching maturity.
For example, let's say someone purchases a discount bond with a par value of $1000 for $700. By holding the bond, they can expect a maximum gain of $300. Any appreciation above the $700 paid is called the accrued market discount.
This rise in price is different than that which occurs in regular coupon bonds as a result of lowering interest rates.
Investment dictionary. Academic. 2012.
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