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Pure Discount Bond
A type of bond that is sold at a discount to its face value, pays no interest to the holder, and is redeemed at its full face value at maturity.
Risk-Free Rate
The theoretical return on an investment with zero risk, often represented by the yield on government securities.
Face Value
The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing the amount to be paid at maturity or the value of a share.
Straight Bond Value
The present value of a bond's future interest payments and its redemption value at maturity, assuming it has no special features.
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