zero coupon security
- noun
- /ˈziːroʊ ˈkuːpən sɪˈkjʊrɪti/
- Specialized
:
valor cero cupón
- When the zero coupon security matures, investors receive the full face amount without any interest payments.
Examples
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A zero coupon security is attractive because it can be purchased at a lower price than its face value.
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At maturity, a zero coupon security pays the investor its full face value.
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A zero coupon security may appeal to those who do not need regular income from their investment.
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Investors often choose zero coupon security for long-term goals like funding college expenses.
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Investing in a zero coupon security can be a smart choice.
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Many investors prefer zero coupon securities for their tax benefits.
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Parents often invest in a zero coupon security to save for their children's future education costs.
Synonyms
A loan you buy for less than its value that pays no interest until it ends
An investment sold for less than its full value that pays no interest until it ends
A bond sold for less than its value that pays no interest and gives the full amount when it ends
Surface Forms
Morphology
The meaning is directly compositional: 'zero' = no, 'coupon' = periodic interest payment on a bond, and 'security' = a financial instrument, so a security with no coupon payments is predictable from the parts. Although financial, the construction follows normal adjective + noun composition and is thus understandable to a learner who knows the constituent terms.
Etymology
Zero coupon security creates a simple picture: a bond with zero coupons — no small interest tickets to collect while you hold it. You buy it at a big discount and later receive the full 'face value' at 'maturity', so it means a security that pays no regular interest but gives one large payment at the end.
