Explain zero coupon bondsthe bonds that are sold at a, Ask an Expert

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Explain Zero coupon bonds

The bonds that are sold at a discount from face value and do not pay any coupon interest over their life are known as Zero coupon bonds. At maturity the investor gets the full face value. Other type of zero coupon bonds is stripped bonds. A stripped bond is a zero coupon bond which results from stripping the coupons and principal from a coupon bond. The result is a series of zero coupon bonds defined by the individual coupon and principal payments.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9544719

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