Asked by Akarshna Premanand on Jun 04, 2024
Verified
Provide an appropriate definition of stripped bond or zero-coupon bond.
Zero-Coupon Bond
A bond that does not pay periodic interest, but is issued at a deep discount, with the return being the difference between the purchase price and the face value at maturity.
Stripped Bond
A debt security where the principal and regular coupon payments have been separated and are sold as individual securities.
- Distinguish and clarify assorted terms and concepts related to bonds, like coupon rate, yield to maturity, call protection, and indenture.
Verified Answer
ON
Olivia NaylorJun 10, 2024
Final Answer :
Bond that may be sold back to the issuer at a pre-specified price before maturity.
Learning Objectives
- Distinguish and clarify assorted terms and concepts related to bonds, like coupon rate, yield to maturity, call protection, and indenture.