ZFinance glossary

Zero-Coupon Bond

Quick definition

A bond sold at a discount that pays no periodic interest.

Overview

A zero-coupon bond is a bond sold below its nominal value that pays no regular interest but repays its full nominal value at maturity.

Common uses

  • Investment strategies
  • Portfolio management
  • Tax savings

Examples of use in small businesses

  • Long-term investment
  • Optimising cash
  • Forecasting cash flows
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