Zero-coupon bonds

Name: Zero-coupon bonds
Brand: Quizplus
Rating: 4.7 (54 reviews)

Question

Zero-coupon bonds

Quizplus · Accepted Answer

Zero-coupon bonds provide no annual interest payments, instead, they are sold at a discount to face value and provide a lump sum payment at maturity. Therefore, option A is correct. Option B is partially correct as zero-coupon bonds can have volatile prices, especially with changes in interest rates. Option C is incorrect as the income from zero-coupon bonds is subject to taxation.

Zero-Coupon Bonds