A bond that does not require a periodic cash payment, but instead promises a single payment at maturity, is called a _____ bond.
A)sinking fund
B)zero coupon
C)debenture
D)perpetual
E)convertible

Question

Quizplus · Accepted Answer

A zero coupon bond does not make periodic coupon payments, but instead, the investor receives a lump-sum payment at maturity. A sinking fund bond requires periodic cash payments to be made into a sinking fund, which is used to retire the bonds at maturity. A debenture is an unsecured bond that does not have any specific collateral backing it. A perpetual bond does not have a maturity date and pays interest indefinitely. A convertible bond allows the investor to convert the bond into a predetermined number of shares of the issuer's common stock.

A Bond That Does Not Require a Periodic Cash Payment