A discount bond
A)pays the bondholder a fixed amount every period and the face value at maturity.
B)pays the bondholder the face value at maturity.
C)pays all interest and the face value at maturity.
D)pays the face value at maturity plus any capital gain.

Question

Quizplus · Accepted Answer

A discount bond is sold for less than its face value and pays the bondholder only the face value at maturity. It does not pay any interest or fixed amount during the life of the bond.

A Discount Bond