Which of the following types of investors would be most likely to purchase zero coupon bonds?

Question

Quizplus · Accepted Answer

Tax-free institutional investors, such as pension funds, are most likely to purchase zero coupon bonds because they can benefit from the deep discount of these bonds without the tax implications that individual investors might face. Zero coupon bonds do not pay periodic interest, which makes them less attractive to individuals seeking regular income or those in high tax brackets, as the imputed interest is taxable.

Which of the Following Types of Investors Would Be Most