Justin Parkinson purchased a bond at a price far below its face value, makes no interest payments, and will be redeemed at its face value at maturity.In all likelihood, he purchased a(n) ____________ bond.

Question

Quizplus · Accepted Answer

Justin Parkinson most likely purchased a zero-coupon bond. This type of bond is sold at a discount to its face value and does not make coupon payments. The bondholder receives its face value at maturity, which is the redemption value.

Justin Parkinson Purchased a Bond at a Price Far Below