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Zero-coupon bond

A bond which pays no coupons, is sold at a deep discount to 

ITS

 face value, and matures at 

ITS

 face value. A 

Zero-coupon bond

 has the important advantage of being free of reinvestment 

Risk

, though the downside is that there is no opportunity to enjoy the effects of a rise in market 

Interest

 rates. Also, such bonds tend to be very sensitive to changes in 

Interest

 rates, since there are no 

Coupon

 payments to reduce the impact of 

Interest

 rate changes. In addition, markets for zero-coupon bonds are relatively 

Illiquid

. Under U.S. 

Tax

 law, the imputed 

Interest

 on a 

Zero-coupon bond

 is taxable as it accrues, even though there is no 

Cash

 flow.



Related Terms: 24

Cash

,

Coupon

,

Coupon bond

,

Dow

,

Import

,

Interest

,

Inc.

,

Imputed interest

,

Interest rate

,

Illiquid

,

ITS

,

Liquid

,

Low

,

Market

,

Own

,

PPO

,

Put

,

Quid

,

Risk

,

Reinvestment

,

Reinvestment risk

,

Tax

,

Unit

,

Zero-coupon bond


Other Related Pages:

Category: Bonds


Starting With: Z


Semi Related Terms: 1003  CLICK HERE TO VIEW

10-Q

,

10-K

,

52-week low

,

Allowance for depreciation

,

Annuity unit

,

Adjustable rate

,

Accreted value

,

Accrual bond

,

Accrual of discount

,

Accrued interest

,

Accrued market discount

,

Accumulation bond

,

After-tax basis

,

Agency bond

,

American Municipal Bond Assurance Corporation

,

Amortization of premium

,

Amortized value

,

Assumed bond

,

At par

,

Authority bond

,

All or any part

,

At best

,

At call

,

Accumulated earnings tax

,

Adjustable rate preferred stock

,

Automatic reinvestment plan

,

Absolute advantage

,

At risk

,

Add-on service

,

Abstract of title

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Adjustable Rate Mortgage

,

Advance rate

,

Annual Percentage Rate

,

Applicable federal rate

,

Assignment of mortgage

,

A shares

,

Assets under management

,

Automatic investment plan

,

At the money

,

Absorption rate

,

Accumulation unit

,

After-tax contributions

,

Age-weighted plan

,

Across the board

,

Additional paid-in capital

,

Average down

,

Average up

,

Abusive tax shelter

,

Ad valorem

,

After-tax

,

Alternative Minimum Tax

,

Assessed value

,

Active market

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Auction market

,

Automated Pricing and Reporting System

,

Away from the market

,

Back pay

,

Below the line

,

Books of final entry

,

Books of original entry

,

Book value per share

,

Burn rate

,

Banking Act of 1933

,

Baby bond

,

Bearer bond

,

Benchmark interest rate

,

Bid-to-cover ratio

,

Blanket bond

,

Bond anticipation note

,

Bond Buyer

,

Bond circular

,

Bond crowd

,

Bond equivalent yield

,

Bond fund

,

Bond indenture

,

Bond market

,

Bond ordinance

,

Bond quote

,

Bond resolution

,

Bond swap

,

Brady bond

,

Bullet bond

,

Bureau of Public Debt

,

Brought over the wall

,

Buying on margin

,

Buy on close

,

Buy on opening

,

Buy the book

,

Balance of payments

,

Bank Rate

,

Base interest rate

,

Bear market

,

Board of Governors

,

Bulldog market

,

Break-even analysis

,

Breaking the syndicate

,

Bill of exchange

,

Bill of sale

,

Breach of trust

,

By the book

,

Balloon payment

,

Base rate

,

Blended rate

,

Broker loan rate

,

Bust-up takeover

,

Breakup value

,

Back-end load

,

Benchmark risk

,

B shares

,

Buy and write

,

Buy-side

,

Balanced investment strategy

,

Before-tax income

,

Break-even tax rate

,

Breadth-of-market theory

,

Beat the gun

,

Bull market

,

Capital investment

,

Capitalized interest

,

Cash

,

Cash asset ratio

,

Cash basis

,

Cash budget

,

Cash control

,

Cash conversion cycle

,

Cash cycle

,

Cash earnings

,

Cash equivalence

,

Cash journal

,

Cash ratio

,

Cost Of Goods Sold

,

Cost of sales

,

Cash reserves

,

Compound interest

,

Callable bond

,

Called bond

,

Call risk

,

Capital market

,

Cash equivalents

,

Catastrophe bond

,

CAT bond

,

Certificateless municipal bond

,

Certificate of Participation

,

Collateralized Bond Obligation

,

Combination bond

,

Committee on Uniform Securities Identification Procedures

,

Commodity-backed bond

,

Companion bonds

,

Consolidated bond

,

Conversion value

,

Corporate bond equivalent

,

Coupon

,

Coupon bond

,

Coupon pass

,

Coupon rate

,

Coupon yield

,

Credit risk

,

Current coupon bond

,

Current market value

,

Current production rate

,

Call money rate

,

Cash account

,

Code of procedure

,

Cash dividend

,

Capitalization of income

,

Capitalization rate

,

Cap rate

,

Civilian unemployment rate

,

Comparative advantage

,

Cost of Living Adjustment

,

Cost-of-living index

,

Council of Economic Advisers

,

Cash and carry trade

,

Cash commodity

,

Cash market

,

Cash price

,

Cash settlement

,

Chasing the market

,

Cheapest to deliver

,

Chicago Board of Trade

,

Commodities Exchange Act

,

Contract market

,

Country risk

,

Cash surrender value

,

Cash value

,

Cash value life insurance policy

,

Cash withdrawal

,

Cost-of-living rider

,

Certificate of stock

,

Common-law voting

,

Cost of carry

,

Certificate of title

,

Contract for deed

,

Cancellation of debt

,

Cash advance

,

Cash collateral

,

Cash credit

,

Cash-out refinancing

,

Certificate of Claim

,

Closed-end credit

,

Consumer interest

,

Cost of debt capital

,

Cost of funds

,

Closed-end fund

,

Closed-end investment company

,

C shares

,

Class of options

,

Close to the money

,

Counterparty risk

,

Covered put

,

Cash Against Documents

,

Certificate of Occupancy

,

Cloud on title

,

Cash-balance plan

,

Cash or Deferred Arrangement

,

Calendar effect

,

Cash sale

,

Choice market

,

Class A Shares

,

Class B Shares

,

Crash of 1929

,

Crash of 1987

,

Capital gains tax

,

Child and dependent care credit

,

Consolidated tax return

,

Coefficient of determination

,

Cup and handle

,

Cash buying

,

Cash delivery

,

Certificate of delivery

,

Close a position

,

Close market

,

Continuous market

,

Cornering the market

,

Curbs in

,

Deferred tax

,

Deposit in transit

,

Date of issue

,

Date of payment

,

Dealer market

,

Debt market

,

Deep-discount bond

,

Deferred interest bond

,

Delivery vs. payment

,

Discount bond

,

Discounted bond

,

Dollar bond

,

Dual currency bond

,

Deep discount broker

,

Discount broker

,

Division of Enforcement

,

Division of Investment Management

,

Division of Market Regulation

,

Do Not Reduce

,

Date of record

,

Dividend discount model

,

Dividend in arrears

,

Dividend rate

,

Dividend Reinvestment Plan

,

Desk (the)

,

Discount rate

,

Division of labor

,

Discounted Cash Flow Analysis

,

Dow

,

Dow Jones Averages

,

Dow Jones Industrial Average

,

De-escalation clause

,

De facto

,

Doing business as

,

Durable Power of Attorney

,

Date of maturity

,

Debtor in possession

,

Debtor-in-possession financing

,

Deed of Release

,

Deed of Trust

,

Default risk

,

Deferred payment

,

Discharge of bankruptcy

,

Discharge of lien

,

Discount loan

,

Down payment

,

Due-on-sale clause

,

Deep in the money

,

Deep out of the money

,

Downside protection

,

Deed of Surrender

,

Department of Housing and Urban Development

,

Deferred payment annuity

,

Defensive investment strategy

,

Diversifiable risk

,

Dogs of the Dow

,

Double up

,

Dow dividend theory

,

Down volume

,

Daily low

,

Deep market

,

Depth of market

,

Discount yield

,

Double auction market

,

Downside risk

,

Deal flow

,

Economic value

,

Effective annual interest rate

,

Eurodollar certificate of deposit

,

Exact interest

,

Equity risk premium

,

Escrowed to maturity

,

Eurodollar bond

,

Euroyen bond

,

Event risk

,

External market

,

Either-or order

,

European Currency Unit

,

Exchange rate

,

Economic growth rate

,

Edge Act

,

E-mini

,

Exchange for futures

,

Exchange for physical

,

Exchange of spot

,

Exchange versus cash

,

Emerging market

,

Export-Import Bank

,

Excluded risk

,

Effective tax rate

,

Explicit interest

,

Estate tax

,

Employee Retirement Income Security Act of 1974

,

Earned income tax credit

,

Estimated tax

,

Excess profits tax

,

Excise tax

,

Even lot

,

Even spread

,

Even up

,

First In First Out

,

Form 10-Q

,

Federal Savings and Loan Association

,

Face-amount certificate

,

Fidelity bond

,

Flight to quality

,

Floating-rate bond

,

Flow of funds

,

Free bond

,

Fill or kill

,

Free riding

,

Front-ending an order

,

Floating exchange rate

,

Foreign exchange rate

,

Forward exchange rate

,

Forward P/E

,

Factors of production

,

Favorable balance of trade

,

Federal Reserve Discount Rate

,

Free enterprise

,

Free market

,

Free market price

,

Free trade

,

Foreign direct investment

,

Face amount

,

Fee-for-service

,

Front-end load

,

Fair market value

,

Form 8-K

,

Form S-1

,

Friends and family offering

,

Fair Credit Reporting Act

,

Fair Debt Collection Practices Act

,

Financial risk

,

Fixed rate

,

Fixed-rate loan

,

Fixed-Rate Mortgage

,

Floating rate

,

Forward interest rate

,

Forward Rate Agreement

,

Full faith and credit

,

Family of funds

,

Fund of funds

,

Free and clear

,

Federal Insurance Contributions Act

,

Fixed investment trust

,

Free float

,

Free right of exchange

,

Federal ID Number

,

Federal Tax Identification Number

,

Federal tax lien

,

Flat tax

,

Franchise tax

,

Fair value

,

Fourth market

,

Free delivery

,

General Obligation Bond

,

Global bond

,

Gold bond

,

Government Bond

,

Guaranteed bond

,

Guaranteed Investment Contract

,

Glass-Steagall Act

,

G-7

,

General Agreement on Tariffs and Trade

,

G-8

,

Graduated payment

,

Growth and income fund

,

Gather in the stops

,

Gift tax

,

Graveyard market

,

High-grade bond

,

Housing bond

,

Hart-Scott-Rodino Act of 1976

,

Hit the bid

,

House of issue

,

Hang Seng Index

,

Health Insurance Portability and Accountability Act

,

Holder in due course

,

Hang out loan

,

Home equity line of credit

,

Home Mortgage Disclosure Act

,

Housing Market Index

,

Hidden tax

,

Head and shoulders

,

High-low index

,

Hammering the market

,

Held at the opening

,

Holding the market

,

Hunkering down

,

Imputed value

,

Investment flows

,

Interest-bearing

,

Income bond

,

Index bond

,

Index-linked bond

,

Industrial revenue bond

,

In escrow

,

Installment bond

,

Insured bond

,

Interchangeable bond

,

Interest rate collar

,

Interest rate risk

,

Interest rate swap

,

Intrinsic value

,

Investment bill

,

Investment-grade bond

,

Investment letter

,

Investment security

,

Investment value

,

Irredeemable bond

,

In-house

,

Investment Advisor Act of 1940

,

Investment bank

,

Investment banker

,

Investment Bankers Association

,

Investment banking

,

Investment banking group

,

Investment Company Act of 1940

,

In line

,

Inefficient market

,

Inflation rate

,

Investment multiplier

,

Interest rate futures

,

Inverted market

,

Import

,

Interbank Rate

,

Internal market

,

Insurable interest

,

Inside market

,

Insider Trading sanctions Act of 1984

,

Interest

,

Interest expense

,

Internal Rate of Return

,

Indication of interest

,

Inc.

,

In intestacy

,

Inter vivos trust

,

Imputed interest

,

Interest deduction

,

Interest-only loan

,

Interest rate

,

Interest rate cap

,

Interest rate ceiling

,

Interest rate floor

,

In play

,

In-process research and development

,

Income risk

,

Investment company

,

Investment fund

,

Investment objective

,

Investment policy

,

Investment trust

,

Interest rate option

,

I/O strip

,

Illiquid

,

Inchoate interest

,

Inheritance tax

,

Interest-only strip

,

Investment property

,

Immediate payment annuity

,

In-service withdrawal

,

Idiosyncratic risk

,

Investment philosophy

,

Individual tax return

,

Imbalance of orders

,

Imperfect market

,

In and out

,

In sympathy

,

In the tank

,

ITS

,

Junk bond

,

Jointly and severally

,

Jumping the gun

,

Joint and several liability

,

Joint and survivor annuity

,

January Effect

,

Joint tax return

,

Last In First Out

,

Liquidation value

,

Lender of last resort

,

Law day

,

Law of one price

,

Limited risk

,

Long Bond

,

Lending at a rate

,

Limit-on-close order

,

Long Market Value

,

Law of demand

,

Law of supply

,

Limit down

,

Limit up

,

London International Financial Futures and Options Exchange

,

London Inter-Bank Offer Rate

,

Liquid

,

Letter of comment

,

Legal age

,

Legal risk

,

Line of credit

,

Loan-to-cost

,

Loan-to-value

,

Loan value

,

Loan-value ratio

,

Lock-in

,

Leading the market

,

Locked in

,

Long-term gain or loss

,

Luxury tax

,

Level I quotes

,

Liquid market

,

Locked market

,

Low

,

Modified cash basis

,

Maintenance bond

,

Market basket

,

Market capitalization

,

Market conversion price

,

Maturity value

,

Medium-term bond

,

Moral obligation bond

,

Mortgage bond

,

Municipal bond

,

Municipal bond fund

,

Municipal bond insurance

,

Municipal Bond Insurance Association

,

Municipal investment trust

,

Municipal revenue bond

,

Make a market

,

Margin rate

,

Market if touched order

,

Market letter

,

Market maker

,

Market maker spread

,

Market on close order

,

Market order

,

Mark-to-market

,

Medium of exchange

,

Marginal propensity to consume

,

Market economy

,

Mature economy

,

Market rate

,

Minimum payment

,

Money at call

,

Mortgage interest deduction

,

Mortgage rate

,

Mortgage risk

,

Married put

,

Market cap

,

Market neutral

,

Market portfolio

,

Market timer

,

Market timing

,

Mill rate

,

Market analysis

,

Market

,

Market inefficiency

,

Market opening

,

Market return

,

Market-share weighted index

,

Market surveillance

,

Market-value weighted index

,

Market Volatility Index

,

Mixed market

,

Money flow

,

Net book value

,

Net interest margin

,

Net investment

,

Non-cash expense

,

Negotiable certificate of deposit

,

Negotiable Order of Withdrawal

,

National Market System

,

Nine-Bond Rule

,

Nominal rate

,

Non-callable bond

,

Non-interest-bearing note

,

Notice of Sale

,

National Association of Securities Dealers

,

National Association of Securities Dealers Automated Quotations system

,

No limit order

,

No quote

,

Normal market

,

No-Fault

,

Net Asset Value

,

No-Action Letter

,

Null and void

,

No-lien affidavit

,

Notice of Default

,

No-load

,

Non-resident alien tax

,

Naked put

,

National Association of Real Estate Investment Trusts

,

Non-investment property

,

Normal retirement age

,

Nasdaq Small Cap Market

,

No-load stock

,

Nominal value

,

Narrow market

,

National Market Advisory Board

,

Negotiated market

,

Net change

,

No book

,

Off the books

,

Operating cash flows

,

Office of Thrift Supervision

,

Ordinary interest

,

Obligation bond

,

Original Issue Discount

,

Out-of-favor

,

Over-the-Counter

,

On-floor order

,

On margin

,

Or better

,

Order flow

,

Open market operation

,

Operating rate

,

Open interest

,

Opinion of title

,

On account

,

On-the-spot loan

,

Open-end credit

,

Open-end mortgage

,

Open-end fund

,

Open-end management company

,

Out of the money

,

Open-end lease

,

Own

,

Old age, survivors, and disability insurance

,

On-balance volume

,

October Effect

,

On close

,

On open

,

On the opening

,

Open market

,

Operationally efficient market

,

Outside market

,

Petty cash

,

Pooling of interests

,

Pre-tax profit margin

,

Profit and loss statement

,

Par bond

,

Pass-through coupon rate

,

Payment date

,

Payment-in-kind security

,

Performance bond

,

Pickup bond

,

Premium bond

,

Premium over bond value

,

Premium over conversion value

,

Price Value of a Basis Point

,

Prior lien bond

,

Privileged bond

,

Public bond

,

Public purpose bond

,

Put bond

,

Put provision

,

Payment for order flow

,

P&L

,

Provision for income taxes

,

Physical market

,

Periodic payment plan

,

PPO

,

Primary market

,

Power of Attorney

,

Paid up

,

Personal interest

,

Prepaid interest

,

Prepayment risk

,

Prime rate

,

Principal risk

,

Prioritization of debt

,

Private Market Value

,

Prime rate fund

,

Protective put

,

Protective put buying

,

Put

,

Put option

,

Put swaption

,

Put warrant

,

Property tax

,

Prudent Expert Act

,

Paid-in capital

,

Paid-in surplus

,

Private Investment in Public Equity

,

Perfect capital market

,

Preservation of capital

,

Put ratio backspread

,

Progressive tax

,

Proportional tax

,

Point-and-figure chart

,

Painting the tape

,

Put/call ratio

,

Quid

,

Replacement value

,

Reports and Records

,

Residual value

,

Retention rate

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Risk adjusted return

,

Run rate

,

Real interest rate

,

Regulation Q

,

Rate covenant

,

Real Estate Mortgage Investment Conduit

,

Redeemable bond

,

Registered coupon bond

,

Revenue bond

,

Risk

,

Reading the tape

,

Receive against payment

,

Receive versus payment

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Round of funding

,

Rules of Fair Practice

,

Rate of exchange

,

Reciprocal of European terms

,

Reinvestment

,

Regulated investment company

,

Real economic growth rate

,

Reduced paid-up insurance

,

Reinvestment risk

,

Red herring

,

Regulation A

,

Right of first refusal

,

Right of rescission

,

Right to Know

,

Rate-improvement

,

Rate lock

,

Regulation Z

,

Renegotiable rate

,

Revolving line of credit

,

Right of recourse

,

Rule of 78

,

Reinvestment privilege

,

Roll down

,

Roll up

,

Right of redemption

,

Retirement Equity Act of 1984

,

Risk/return trade-off

,

Risk arbitrage

,

Risk-averse

,

Risk management

,

Risk neutral

,

Risk premium

,

Risk seeking

,

Regressive tax

,

Relative Strength Index

,

Return on Capital Employed

,

Rate of return

,

Real rate of return

,

Risk capital

,

Salvage value

,

Selling, General and Administrative Expenses

,

SG&A

,

Savings and Loan

,

Sight letter of credit

,

Simple interest

,

S&L

,

Stop payment

,

Savings Bond

,

Secondary market

,

Secured bond

,

Securities and Exchange Commission

,

Self-supporting bond

,

Serial bond

,

Series bond

,

Series EE bond

,

Series HH bond

,

Short bond

,

Split coupon bond

,

Spot rate

,

Step-up bond

,

Straight bond

,

Straight value

,

Super sinker bond

,

Surety bond

,

Segregation of securities

,

Sell-side analyst

,

Sell the book

,

Specialist unit

,

Savings rate

,

Standard of living

,

Supply-side economics

,

Swap rate

,

Systemic risk

,

Spot market

,

Second-to-die insurance

,

Surrender value

,

Short interest

,

Short interest ratio

,

Stock market

,

Statute of Limitations

,

Statutory investment

,

Sale and leaseback

,

Satisfaction of debt

,

Secondary mortgage market

,

Security interest

,

Single-payment loan

,

Standard payment calculation

,

Start rate

,

Staggered board of directors

,

Systematic investment plan

,

Selling the spread

,

Short market value

,

Step-up warrant

,

Synthetic put

,

Step-down lease

,

Step-up lease

,

Savings Incentive Match Plan for Employees

,

Social Security Tax

,

Shareholder value

,

Selling short against the box

,

Shorting against the box

,

Sales tax

,

S Corporation

,

Self-employment tax

,

Separate tax returns

,

Short-term gain or loss

,

Sin tax

,

Standard mileage rate

,

Subchapter M

,

Subchapter S Corporation

,

Schedule C

,

Securities Act of 1933

,

Securities Acts Amendments of 1975

,

Securities Exchange Act of 1934

,

Seek a market

,

Specialist market

,

S&P phenomenon

,

Stop and reverse

,

Times interest earned

,

Tax anticipation note

,

Tax-exempt bond

,

Tax renevue anticipation note

,

T-Bill

,

Term bond

,

Term to maturity

,

Treasury Bond

,

Take a position

,

Two-sided market

,

Two-way market

,

Trailing P/E

,

Trickle-down theory

,

Tax haven

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Tax

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Theoretical value

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Tax lien

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Tax roll

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Tenancy at will

,

Transfer tax

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Tax deferral

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Tax-deferred

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Top hat plan

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Transfer payments

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Ten-bagger

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The Street

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Timing the market

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Top-down

,

Taxable event

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Taxable income

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Taxable wage base

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Tax-advantaged

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Tax audit

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Tax base

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Taxpayer Relief Act of 1997

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Tax Reform Act of 1986

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Tax Reform Act of 1993

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Tax sale

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Tax shelter

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Tax shield

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Tax swap

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Tax tables

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Take a bath

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Thin market

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Third market

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Tight market

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Transparent market

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U.S. Government Agency Security

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U.S. Savings Bond

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U.S. Treasury

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U.S. Treasury Bill

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U.S. Treasury Bond

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U.S. Treasury Note

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U.S. Treasury Securities

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Unit

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Unlimited risk

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Unlimited tax bond

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Uniform Securities Act

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Unemployment rate

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Unearned interest

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Uncovered put

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Unit Investment Trust

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Unit Trust

,

Unsystematic risk

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Unified Tax Credit

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Up volume

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Unit of trade

,

Unit of trading

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Variable rate

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Value stock

,

Victim Impact Statement

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Value averaging

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Value investing

,

Value Added Tax

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Write down

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Written-down value

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With interest

,

Williams Act

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Waiver of premium

,

Widow-and-orphan stock

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W-2 Form

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W formation

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Weak market

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When, as, and if issued

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Wide market

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X or XD

,

Year-To-Date

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Yankee bond market

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Yield to call

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Yield to maturity

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Yield to worst

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Y shares

,

Zero-base budgeting

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Zero-coupon bond

,

Z shares

,

Zero-beta portfolio

,

Zero-investment portfolio

,

Zero downtick

,

Zero-minus tick

,

Zero-plus tick

,

Zero uptick


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