Current Affairs · Bonds and Securities
What is the defining characteristic of a Zero-Coupon Bond?
- 1It pays interest monthly instead of annually at maturity.
- 2It is always issued at a premium and gives annual dividends.
- 3It pays a variable interest rate linked closely to retail inflation.
- 4It is issued at a discount to its face value and pays no periodic interest.✓
Correct answer
It is issued at a discount to its face value and pays no periodic interest.
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