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zero coupon bondnoun [C]

uk   us  
(also zero) FINANCE a ​type of ​bond that does not ​payinterest, but that you ​buy for less than its face ​value , so that you make a ​profit when it is ​paid back: Zero ​couponbonds are more ​sensitive to ​interestratechanges than ​bonds that ​payinterest periodically. Most zeros are still ​offeringreturns of over 8%.
(Definition of zero coupon bond from the Cambridge Business English Dictionary © Cambridge University Press)
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