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Subject:  Re: Bonds Date:  11/20/2001  11:36 PM
Author:  foobar73 Number:  2464 of 37111

I'm in an accounting class learning about bonds. I cannot figure out if a discount or a premium is more preferable to the other, or if they are the same. Please make it simple!

A discount means the current value of the bond is lower than its original worth. Things are cheaper at a discount store. A premium means the price of the bond is higher than what it originally sold for. You pay more for premium gasoline.

Which is better depends on what you're doing with the bonds. Buying bonds at a discount is usually a good idea. People selling bonds tend to prefer getting a premium.
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