Question

A bond that has only one payment, which occurs at maturity, defines which one of the following?

1) debenture
2) callable
3) floating-rate
4) junk
5) zero coupon

Answer 1

A zero coupon bond is the type of bond that has a single payment at maturity, typically issued at a discount and including no periodic interest payments.

Step-by-step explanation:

The bond that has only one payment, which occurs at maturity, is a zero coupon bond. Unlike traditional bonds that make periodic interest payments, a zero coupon bond is issued at a discount to its face value and does not pay interest until it matures. At maturity, the bondholder receives a single payment that is equal to the face value of the bond. The difference between the purchase price and the face value represents the investor's earnings, akin to the compounded interest that would have been paid over time.