A zero coupon bond provides for _____ periodic payments of interest while the bond is outstanding; and the bond requires payment of all _____ at maturity.

Question

Quizplus · Accepted Answer

A zero coupon bond does not provide for any periodic payments of interest, hence option A and C are eliminated. At maturity, the bond requires payment of the principal amount, along with the accrued interest, hence option B is correct. Option D is incorrect as it suggests monthly payments of principal, which is not true for a zero coupon bond.

A Zero Coupon Bond Provides for _____ Periodic Payments of Interest