The bonds that does not pay any interest rate are considered as ___________?
Correct answer: B. zero coupon bond
- A. interest free bond
- B. zero coupon bond
- C. price less coupon bond
- D. useless price bonds
Explanation
A zero-coupon bond makes no periodic interest payments and is normally issued below face value, with the investor's return coming at maturity. The absence of coupons does not make the bond useless or literally interest-free in economic return.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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