BABs are known as 'zero coupon' securities because _________________
A)They are not considered to be debt securities
B)They do not offer an interim interest payment
C)They do not require a final principle payment
D)They do not contain an interest component

Question

Quizplus · Accepted Answer

BABs, or Build America Bonds, are known as 'zero coupon' securities because they do not offer an interim interest payment. Instead, they are sold at a discount and pay out a lump sum at maturity. This distinguishes them from traditional bonds, which offer regular interest payments throughout the life of the bond.

BABs Are Known as 'Zero Coupon' Securities Because _________________