Question:
Zero coupon bonds are issued
Zero coupon bonds are issued
Show Hint
Zero coupon bonds are issued at a discount, with the entire interest being paid at maturity.
Updated On: Sep 1, 2025
- At zero rate of interest
- With specified rate of interest
- Without specified rate of interest
- None of these
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
Step 1: Definition of zero coupon bonds.
Zero coupon bonds are debt securities that do not pay periodic interest payments. Instead, they are issued at a deep discount to their face value and mature at par value.
Step 2: Features of zero coupon bonds.
These bonds are issued at a zero rate of interest, meaning the investor does not receive any regular interest payments, but instead, the interest is accumulated in the form of a capital gain at maturity.
Step 3: Conclusion.
Thus, the correct answer is (A) At zero rate of interest. Final Answer: \[ \boxed{\text{At zero rate of interest}} \]
Zero coupon bonds are debt securities that do not pay periodic interest payments. Instead, they are issued at a deep discount to their face value and mature at par value.
Step 2: Features of zero coupon bonds.
These bonds are issued at a zero rate of interest, meaning the investor does not receive any regular interest payments, but instead, the interest is accumulated in the form of a capital gain at maturity.
Step 3: Conclusion.
Thus, the correct answer is (A) At zero rate of interest. Final Answer: \[ \boxed{\text{At zero rate of interest}} \]
Was this answer helpful?
0
0
Questions Asked in UP Board XII exam
- If \(A = \begin{bmatrix} 3 & 1 \\ -1 & 2 \end{bmatrix}\), then show that \(A^2 - 5A + 7I = O\). Using this, obtain \(A^{-1}\).
- UP Board XII - 2025
- Matrices
- If \( y = \sin^{-1} x \), then prove that \( (1 - x^2) \frac{d^2y}{dx^2} - x \frac{dy}{dx} = 0 \).
- UP Board XII - 2025
- Differential Equations
- If \(A = \begin{bmatrix} 1 & 3 & 3 \\ 1 & 4 & 3 \\ 1 & 3 & 4 \end{bmatrix}\), then find \(A^{-1}\).
- UP Board XII - 2025
- Matrices
- Solve: \( (1 + x^2)\frac{dy}{dx} + 2xy - 4x^2 = 0 \).
- UP Board XII - 2025
- Differential Equations
- Prove that \(\int_0^\pi \sqrt{\frac{1+\cos 2x}{2}} \, dx = 2\).
- UP Board XII - 2025
- Calculus
View More Questions