Zero-coupon bond, finance, Other Engineering

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Zero-Coupon Bond is a type of bond gives no periodic interest payments, instead is sold at a steep discount from its face value. Due to these bonds these do not pay interest until maturity and their prices tend to be more volatile than bonds which pay interest regularly. Interest income is a subject to ordinary income tax each year or even though the investor does not receive any income payments. These Bonds sold prior to maturity can be worth more and less than their original cost.

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