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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Last modified 8mo ago