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

question 77

Multiple Choice

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

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

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Definitions:

Aversive Stimulus

A negative or unpleasant stimulus that is used to induce a change in behavior through aversion therapy or conditioning.

Positive Punishment

A behavioral concept where introducing an undesirable consequence after an action decreases the likelihood of that action being repeated.

Spanked

The act of striking the buttocks of another person to cause physical pain, typically used as a form of punishment.

Running Into

Encountering or unexpectedly meeting someone or something.