Question

A corporate entity issues a debt instrument known as a "Zero Coupon Bond." How does an investor realize an financial return or effective interest from this instrument?

A The interest rate is reset semi-annually based on a 50 basis points spread over government yields.
B The investor receives regular dividend payouts distributed from the company's retained earnings.
C The bond is issued at a premium over face value and redeemed at a massive discount.
D The effective interest is earned via periodic coupon payments that fluctuate with underlying asset indices.
E The bond is issued at a discount to its face value and redeemed at full face value upon maturity.
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