Examlex

Solved

The Return on a Zero-Coupon Bond Is Derived from the Difference

question 81

True/False

The return on a zero-coupon bond is derived from the difference between the purchase price of the bond and its par value.


Definitions:

Geometric Average

A method of calculating the average rate of return that considers the compounding effect of returns over time.

Risk-Free Security

An investment that is assumed to be free from any risk of financial loss, typically represented by government bonds.

Arithmetic Return

The simple average of a set of returns over a period.

Related Questions