zero coupon bond
noun[C]
ukusFINANCE(alsozero)
atypeofbondthat does notpayinterest, but that youbuyfor less thanitsfacevalue, so that you make aprofitwhen it ispaidback:
Zerocouponbondsare moresensitivetointerestratechangesthanbondsthatpayinterestperiodically.
Most zeros are stillofferingreturnsof over 8%.