Zero-Coupon Bonds
Interactive

Zero-Coupon Bonds

Intuition Publishing
Updated Sep 23, 2020

A zero-coupon bond (commonly referred to as a zero) is a bond in which no interest payments are made to the bondholders during the lifetime of the bond. The pricing of a zero is examined as are reasons why investors are prepared to pay those prices for a zero. We see why zero came into being and how the market has grown in terms of diversity. Finally, we look at the risks associated with zeroes for investors.