Fixed Income
Zero-Coupon Bond
Definition
What is Zero-Coupon Bond?
A bond that pays no periodic coupon and is issued or traded below the amount repaid at maturityThe date when a debt investment's principal is scheduled to be repaid..
Example in practice
How This Looks in Practice
An investorA person or organisation that commits capital with the expectation of a financial return. pays ₦70,000 today and receives ₦100,000 at maturity.
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Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.