## Discount

Discount refers to the price of a bond when it is below its par value. An example is if the par value of the bond is $1,000 and the bond is selling for $980, the bond is selling at a discount of ($1,000 – $980) =$20.

Discount refers to the price of a bond when it is below its par value. An example is if the par value of the bond is $1,000 and the bond is selling for $980, the bond is selling at a discount of ($1,000 – $980) =$20.

Derivative is a type of security whose value is “derived” from an underlying asset. (Eg; Futures and Options). Futures and options are both derivatives – meaning a security whose value solely depends on the value of the underlying asset. A future derives its value from the commodities or currencies which it represents An option derives its value from the underlying stock Futures and options were … Continue reading Derivative

A depression is a recessionary decline in real GDP (taking inflation into account) greater than 10% lasting at least 3 years.

Delta is also called the hedge ratio, which is the ratio of the change in price of an option to the change in price of the underlying stock.