Question
Do you know what zero coupon bonds are?

Answers

A zero coupon bond does not pay any coupons during the term of the bond.  The bond is issued at a discount to the face value, and redeemed at face value. The effective interest earned is the difference between face value and the discounted issue price. A zero coupon bond with a long maturity is issued at a very big discount to the face value. Such bonds are also known as deep discount bonds.   Your Comment




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