Zero Coupon Bond

Home » CMA Glossary Term » Corporate Finance » Zero Coupon Bond

A zero coupon bond is a debt security that does not pay periodic interest, or coupons, during its life. Instead, it is issued at a discount to its face value and matures at par, with the difference representing the investor’s return. This zero coupon bond definition highlights its appeal for investors seeking a lump sum at maturity.

CMA Exam Academy 16-Week Accelerator Program