Accrued Market Discount Law and Legal Definition
Accrued market discount refers to the rise or the gain in the market value of a discounted bond that occurs as it nears the maturity date. As discount bonds are sold below face value, it is deemed that their value will gradually increase until reaching maturity. For example, a bond with a face value of $200 might be purchased for the discounted price of $100. Over time, the market value of this bond will slowly rise from $100, reaching $200 at the maturity date. At that time it will be redeemable for the full face value. This increase in market value is not related to a change in market interest rates.
