Zero coupon

From ACT Wiki
Jump to navigationJump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

Zero coupon instruments pay only a single amount at their final maturity. They do not pay any intermediate interest.

Investors in zero coupon instruments are not exposed to reinvestment risk, because the whole of their return is enjoyed via the capital gain up to maturity, which is fixed from the investment date.

(So long as they hold their investment for its full life, up to its final maturity.)


See also