Deep discount bonds are semi-annual fixed-rate coupon bonds that sell at a market price that is less than par value.

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Deep discount bonds are bonds that sell at a significant discount from par value, but they do not necessarily pay semi-annual fixed-rate coupons. Many deep discount bonds are zero-coupon bonds, meaning they pay no interest and instead are issued at a deep discount to their face value, with the return to the investor being the difference between the purchase price and the face value at maturity.

Deep Discount Bonds Are Semi-Annual Fixed-Rate Coupon Bonds That Sell