Meaning of “zero coupon bond” in the English Dictionary

business-english dictionary

"zero coupon bond" in Business English

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zero coupon bondnoun [ C ]

uk us

also zero FINANCE a type of bond that does not pay interest, but that you buy for less than its face value , so that you make a profit when it is paid back:

Zero coupon bonds are more sensitive to interest rate changes than bonds that pay interest periodically.
Most zeros are still offering returns of over 8%.

(Definition of “zero coupon bond” from the Cambridge Business English Dictionary © Cambridge University Press)