Zero-coupon bond type of bond is certain to provide a capital loss if held to maturity.
A 0 coupon bond is a bond wherein the face value is repaid on the time of maturity. unlike normal bonds, it does no longer make periodic hobby payments or have so-referred to as coupons, as a result the term zero-coupon bond. while the bond reaches maturity, its investor receives its par fee.
zero coupon bonds are bonds that don't pay hobby all through the lifestyles of the bonds. as an alternative, traders buy zero coupon bonds at a deep discount from their face price, that is the amount the investor will get hold of whilst the bond "matures" or comes due.
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