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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

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

Maturity value

What's the maturity value of a bond?

Yield

Income from an investment as a percentage of its current price.

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.

Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

Alpha

The percentage by which an investor outperforms a relevant benchmark.

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.

Margin call

Learn what a margin call stands for in financial terms.

Investment Trust

A company that pools money together from multiple investors and then invests it.

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