A split coupon bond combines a zero coupon bond with a high coupon bond.

Name: A split coupon bond combines a zero coupon bond with a high coupon bond.
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Question

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A split coupon bond is structured to have an initial period where it pays no interest (like a zero coupon bond) and then switches to a period where it pays interest at a higher rate (like a high coupon bond), combining features of both types of bonds.

A Split Coupon Bond Combines a Zero Coupon Bond with a High