Zero-coupon bond

Definition:

A bond in which no periodic coupon is paid over the life of the contract. Instead, both the principal and the interest are paid at the maturity date.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Mortgage bond

A bond in which the issuer has granted the bondholders a lien against the pledged assets. See: Collateral trust bonds

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