A bond that makes no coupon payments and is initially priced at a deep discount is called a ________ bond.
A)Treasury
B)municipal
C)floating-rate
D)junk
E)zero coupon

Question

Quizplus · Accepted Answer

A zero coupon bond is one that does not make any coupon payments and is initially priced at a deep discount. This means that the bond is sold at a price lower than its face value, and the investor receives the face value at maturity. Therefore, the correct answer is E - zero coupon.

A Bond That Makes No Coupon Payments and Is Initially