A zero coupon bond is a bond that pays no interest and is offered (and subsequently sells) at par, therefore providing compensation to investors in the form of capital appreciation.

Question

Quizplus · Accepted Answer

A zero coupon bond is sold at a discount to its face value and does not pay periodic interest. The investor receives compensation through capital appreciation when the bond matures at its face value.

A Zero Coupon Bond Is a Bond That Pays No