Zero-coupon bonds, Financial Management

All the bonds are not making periodic coupon payments.

Zero-coupon bonds are those bonds where the bondholder realizes interest by buying it at a deep discount to its face value. Interest is then paid at the maturity date, with the interest being the difference between the par value and the price paid for the bond. One of the advantages of these bonds is that they are free of reinvestment risk, though the downside is that there is no opportunity to enjoy the effects of a rise in market interest rates. These bonds tend to be very sensitive to changes in interest rates.

Accrual bonds are a type of zero-coupon bonds that have contractual coupon payments which are accrued and distributed along with the maturity value at the maturity date.

Posted Date: 9/8/2012 4:37:54 AM | Location : United States







Related Discussions:- Zero-coupon bonds, Assignment Help, Ask Question on Zero-coupon bonds, Get Answer, Expert's Help, Zero-coupon bonds Discussions

Write discussion on Zero-coupon bonds
Your posts are moderated
Related Questions
Example: - MM Foam Company at present has 5000 outstanding shares selling at Rs. 100 each. The firm suppose to have a net earning of Rs. 50000 as well as contemplating a dividend

Q. How will you conclude the cost of capital from different sources? Ans. Implication of Cost of Capital: - Cost of capital of a firm is the least rate of return expected by it


Hedge funds are short two types of funding options. Describe in detail what these options are. Describe why these options become more valuable during a financial crisis. During

Assessing Impact: As with the assessment of likelihood, a valuable way of assessing impact would be the creation of categories of impact as follows: Level

Q. Show the Working Capital Forecasting Techniques? Working Capital Forecasting Techniques or else Computation Of Working Capital: - A number of processes are used to determine

Government securities are the most important and unique financial instruments in the financial markets of any economy. Government of India Securities (GOI Sec) in

annual uasage of stock 100,000units carrying cost per unit of stock RM2 order cost RM250 question there is a constraint arising from the floor space of the

Explain the Competitive Benchmarking Healthcare services or Hospital are compared to rival 'competition 'in the same industry for instance methods of patient care and levels o

given just the sales and profit values, how is the break-even sales calculated?