A Zero-Coupon Bond Is One That

Multiple Choice

A zero-coupon bond is one that

A) effectively has a zero-percent coupon rate.
B) pays interest to the investor based on the general level of interest rates rather than at a specified coupon rate.
C) pays interest to the investor without requiring the actual coupon to be mailed to the corporation.
D) is issued by state governments because they don't have to pay interest.
E) is analyzed primarily by focusing ("zeroing in") on the coupon rate.