Zero coupon bond

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Zero coupon bond is a bond that pays no coupons at all but is offered at a substantial discount below its par value and hence provides capital appreciation rather than interest income.


Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Zero coupon bond. Pays no coupons at all but is offered at a substantial discount below its par value and hence provides capital appreciation rather than interest income.

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