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Bill wants to buy a bond whose face value is substantially higher than its market price. What kind of bond should he buy
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Bill wants to buy a bond whose face value is substantially higher than its market price. What kind of bond should he buy

User Andrew Brock
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1 Answer

6 votes

Answer:

A zero coupon bond

Step-by-step explanation:

A zero coupon bond is a bond that does not pay interest but it is usually issued at a large discount to the face value. The full price of the bond is paid at maturity

For example, the face value of a bond might be $1000 but it's market price is $900.

we market price is less than its face value

User Skie
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