what is a junk bond 
 junk bond is another name for a high yield bond these bonds pay a higher interest rate or yield because they re rated poorly by moody s and s p due to a high risk of default they are considered to be risky for investors 6the bottom linediscounting is the process of selling an asset for something less than its value a 35 000 car that s on sale with a 10 discount can be bought for 31 500 it s discounted by 3 500 a 1 000 bond that comes with a 20 discount can be purchased for 800 bonds are typically discounted because they carry a higher degree of risk to the purchaser or investor the discount is based on the value of an asset s income at the present moment 