Definition of Pure Discount Bond

Pure Discount Bond

A pure discount bond makes a single payment at the maturity date of the bond. U.S. Treasury bills have this characteristic, but pure discount bonds are popular mainly as academic tools. It is convenient to introduce the notion of present value in terms of a pure discount bond because the payment structure is so simple.

The Classic Economic Models includes several models useful for a money and banking course.

    Fixed Income Securities
        mortgage/bond calculator
    Growth Investments
        present value calculator
    Utility-Based Valuation of Risk
    Mean-Variance Analysis:
        Risk vs. Expected Return

This glossary supports the EconModel applications known as the Classic Economic Models. That collection includes 16 of the most important models from microeconomics and macroeconomics. Check out the 10-day free trial.