Bonds sold at a deep discount from face value on which no periodic interest payments are made are referred to as

Question

Quizplus · Accepted Answer

Bonds sold at a deep discount from face value on which no periodic interest payments are made are commonly known as zero-coupon bonds. The discount bond is initially sold at a price below its face value and the difference between the face value and the purchase price is the interest that accrues over the life of the bond. Zero-coupon bonds are also called pure discount or deep discount bonds. Junk bonds are high-risk bonds issued by companies with poor credit ratings, pay-in-kind debentures allow the issuer to pay interest in additional bonds or shares of stock, and a Treasury bond is a government bond that pays a fixed rate of interest at periodic intervals.

Bonds Sold at a Deep Discount from Face Value on Which