Introduction of the term Zero coupon bonds

Question

Give a brief introduction of the term Zero coupon bonds?

Answer 1

Zero coupon bonds is as well named as deep discount bond or discount bond that is been bought at a price lower than its face value that will be given back at the time of maturity. This kind of bond does not create payments of interest in periods. This has already been paid when the bond reaches to the maturity level and its investors are in huge benefit of receiving vast about of sum equivalent to the initial investment.