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Zero-coupon bond - Financial definition

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Translations:      FR  obligation à coupon zéro (n.f.) , obligation zéro-coupon (n.f.)     ES  bono cupón cero (n.m.)     DE  Nullkuponanleihe (n.f.) , Zero-Bond (n.m.) , Zero-Coupon-Anleihe (n.f.) 
Synonym:  zero coupon

Concise definition of the term zero-coupon bond

Bond which are not endowed with a coupon but are issued with the interest discounted. Zero-coupon bonds do not generate any interest payments until their final maturity.

Comprehensive definition of the term zero-coupon bond

Zero-coupon bonds generate interest for their holders by the difference between the purchase price and the redemption price.
They are issued at a deep discount and redeemed at par value at to face value and are especially suitable for long-term investment goals with a definite time horizon because their yield is known if held to maturity.

Additional information related to this definition

Definitions of related terms

Bond  •  Coupon

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