Answer-What does a 'Zero-Coupon Bond' mean?

These bonds do not make periodic interest coupon payments. The interest is the difference between the discounted purchase price and the face value paid at maturity.

Question

What does a 'Zero-Coupon Bond'

mean?

A A bond that pays zero interest but is issued at a deep discount to its face value.

B A bond issued by the government with 0% risk.

C A bond that has been defaulted upon.

D A bond where the interest is paid only at the very beginning.

E A bond that can be converted into equity for free.

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What does a 'Zero-Coupon Bond'

Solution

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