What is the return on bonds of zero maturity coupons?

Revenue for bond of Zero Coupón is a bond that is unusual in that it does not provide any regular interest payments to the person holding it. Instead, the bond holder is guaranteed by the nominal value of the binding when it reaches maturity. The bonds are purchased with a discount on their nominal value, as the bonds are increasing interest for the entire duration on the basis of a predetermined interest rate until they have reached the specified income after their maturity. If a person who has a return on the maturity of zero coupon bonds will try to sell it on the secondary market, find that the value of the bond will be influenced by the predominant interest rates.

bonds use institutions as corporations and government as a way to raise money while investors prefer them because they receive firm income while holding these bonds. In the case of normal bonds, the investor pays the amount for the purchase of the principal and then receives regular interest payments for a predetermined rate of known Jakokupon beforeBefore receiving the director's return if the bond is held to its maturity. However, there is a unique type of bond known as the yield of coupon bonds with zero maturity that promises any regular interest payments, but can still benefit investors.

While interest payments are not received by the investor throughout the bond life, it is important to realize that the income for the maturity of Zero Coupon Bond includes interest. The difference between zero binding and others is that they accumulate interest. If the bond is held to maturity, the interest will receive all the accumulated interest, which, added to the original premium payment, contributes to the nominal value of the bond.

Interest in Zero Coupón's bonds is reported when binding is purchased and generally compounds semi -annual lifetime of binding. Investors pay the amount that is discounted by the nominal value for the purchase of a bond. This discount is foundedAt the interest rate and duration. Both the duration increases, as well as the discount, because there is more time to accumulate interest.

Investors who buy yield for Zero Coupon bonds have the comfort of knowing exactly what they get if they hold the bond to maturity, but there is still a risk. Interest rates will depreciate a bond, because newly issued bonds with higher rates are more valuable. This can cause a problem to investors trying to sell a zero bond on the secondary market. High inflation, which rises above the interest rate of zero bond, can also damage its value.