© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Discount Rate


Investments always carry risk. How much risk they carry is where the discount rate comes in; when fancy numbers are run on discounted cash flow, it lets money types figure out present value.

Basically, you get a higher discount rate for riskier investments.