Tom is thinking of buying zero-coupon bonds. What are these bonds?

Question

Quizplus · Accepted Answer

Zero coupon bonds are bonds that don't make regular interest payments.
Key Takeaway: If Tom buys the zero-coupon bonds he doesn't get interest payments, but he buys the bond at a discount from the face value of the bond. He will be paid the face value when the bond matures. Typically, the face value is the result of the accrual of interest on the original price paid.

Tom Is Thinking of Buying Zero-Coupon Bonds