Economics · Economy
Which of the following statements about a 'zero-coupon bond' is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is an emergency bond issued by governments during crises that carries no interest but provides regular dividend options.
- 2It is a special currency bond used as 'express money' to carry zero interest but offers direct tax credits.
- 3It is a bond with a variable interest rate that offers high liquidity and special tax breaks to the investors.
- 4It is a bond issued at a discount to its face value, pays no periodic interest, and is redeemed at face value upon maturity.✓
Correct answer
It is a bond issued at a discount to its face value, pays no periodic interest, and is redeemed at face value upon maturity.
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