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      Question

      How do Zero Coupon Bonds (ZCBs) generate returns for

      investors, as per the โ‚น10,000 crore issuance allowed to the Power Finance Corporation (PFC)?
      A By providing fixed annual interest payouts Correct Answer Incorrect Answer
      B By offering tax-free interest earnings Correct Answer Incorrect Answer
      C By being issued at a discount and redeemed at full face value Correct Answer Incorrect Answer
      D By being linked to inflation indexation Correct Answer Incorrect Answer
      E By offering flexible interest rates based on market conditions Correct Answer Incorrect Answer

      Solution

      Zero Coupon Bonds (ZCBs) generate returns by being issued at a discount and redeemed at full face value, ensuring investors earn profits upon maturity.

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