How Are Investors in Zero-Coupon Bonds Compensated for Making Such

question 22

Multiple Choice

How are investors in zero-coupon bonds compensated for making such an investment?

• A) Such bonds are purchased at a discount to their face value.
• B) The bond makes regular interest payments.
• C) The face value of these bonds is less than the value of the bond when the bond matures.
• D) Such bonds are purchased at their face value and sold at a premium at a later date.

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Definitions:

Duties Completed

Refers to responsibilities or tasks that have been successfully fulfilled or accomplished.

Contractual Rights

Legal entitlements inherent in a contract that allow parties to perform or enforce the terms agreed upon.

Assignment Situations

Circumstances in which rights or duties under a contract are transferred from one party to another.

Assignability

The capability of a contract or right to be transferred from one party to another.