Which of the following is an advantage of zero coupon bonds?

Question

Quizplus · Accepted Answer

Choice A is correct because zero coupon bonds do not pay periodic interest payments, so the full cash flow occurs at maturity. Choice C is also correct because a discount is applied to the bond at issuance, which is amortized annually as an expense for tax purposes. Choice B is incorrect because the yield of zero coupon bonds is typically higher than their coupon-bearing counterparts due to their lack of periodic interest payments.

Which of the Following Is an Advantage of Zero Coupon