Which of the following statements is true about a zero coupon bond?

Question

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A zero coupon bond is issued at a substantial discount below its par value, which means it does not pay any interest during its term. Instead, the bond is sold for less than its face value, and the bondholder receives its full face value at maturity. Therefore, there is no interest to be taxed each year. However, the bondholder may have to pay taxes on the capital gain at the time the bond matures. The discount on the issue of a zero coupon bond is not written off over its life in the investor's financial statement. The coupon rate of a zero coupon bond does not adjust for inflation.

Which of the Following Statements Is True About a Zero