> For the complete documentation index, see [llms.txt](https://docs.arbor.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.arbor.finance/financial-concepts/zero-coupon-bonds.md).

# Zero Coupon Bonds

A bond is a fixed-income instrument that represents a loan made by an investor to a borrower. A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.

A zero-coupon bond (ZCB) does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.

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The majority of this content was pulled from [Investopedia](https://www.investopedia.com) and modified to better serve Arbor users. We thank [Investopedia](https://www.investopedia.com) for providing these educational materials.
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