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Zero coupon bonds

Zero coupon bond

What is a zero coupon bond?

A zero coupon bond is a bond that does not make interest payments.

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This type of bond is issued at a discount to its maturity value and is redeemed at the maturity value, generating a return for the investor.

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UK Treasury bills are an example of a zero coupon bond.

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Zero coupon bonds can be issued by governments, municipalities, and companies.

More terms

Net Income (NI)

The money a firm is left with from sales after subtracting taxes and different business costs.

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

Collective investment scheme

Learn what's a collective investment scheme

Securities

Bonds and stocks.

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

NASDAQ

A US stock exchange specialising in the shares of technology companies.

Oligopoly

A situation in which a market or industry is controlled by a small group of companies.

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

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