Zero-Coupon Bonds Are Issued at Prices Below Face Value,and the Investor's

question 76

True/False

Zero-coupon bonds are issued at prices below face value,and the investor's return comes from the difference between the purchase price and the payment of face value at maturity.

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Definitions:

Line of Credit

A Line of Credit is a flexible loan from a bank or financial institution allowing the borrower to draw funds up to a specified limit at any time.

Economic Reasons

Factors or situations related to the structure and functioning of the economy that influence decisions and behaviors.

Holding Cash

The practice of keeping liquid assets on hand for transactional purposes or as a precaution against unforeseen expenses.

Maturity Matching Principle

This principle suggests that the duration of assets and liabilities in a company's portfolio should be aligned, meaning short-term assets should be financed with short-term liabilities, and long-term assets with long-term liabilities.