Finance School of management Pure Discount bonds The pure discount bond is an example of the present value of a lump sum equation we analyzed in Chapter 4 Solving this, the yield-to-maturity on a pure discount bond is given by the relationship F F=P1+ iy P uesTc 1010 Finance School of Management Pure Discount Bonds ❖ The pure discount bond is an example of the present value of a lump sum equation we analyzed in Chapter 4. ❖ Solving this, the yield-to-maturity on a pure discount bond is given by the relationship: (1 ) 1 1  −      = +  = n n P F F P i i