zero-coupon security
1
9.0
- noun
- /ˈziːroʊ ˈkuːpən sɪˈkjʊrɪti/
- Specialized
- The zero-coupon security will mature in ten years at its full face value, yielding a profit to the buyer.
Examples
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Many investors value the simplicity of a zero-coupon security because there are no periodic interest payments to track.
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He purchased a zero-coupon security as a long-term investment for his retirement fund.
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Investors are interested in zero-coupon securities for their long-term growth potential.
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A zero-coupon security can provide a significant return at maturity.
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He purchased a zero-coupon security because it offers a reliable return when it matures.
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Many investors prefer a zero-coupon security due to its straightforward investment structure without interest payments.
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The zero-coupon security he bought will pay out its full face value at maturity, making it a secure choice.
Synonyms
163
5.8
A share, bond, or similar item that people buy and sell to invest money
1
7.9
An investment sold for less than its full value that pays no interest until it ends
1
7.1
A loan you buy for less than its value that pays no interest until it ends
Surface Forms
Morphology
zero-coupon + security
The phrase is compositionally transparent: 'zero' (none) modifies 'coupon' (interest payment), and with 'security' (a financial instrument) this yields a security that does not make coupon/periodic interest payments. Although the full financial implications (discount issuance and redemption at maturity) are domain-specific, the core meaning 'a security that pays no periodic interest' is directly derivable from the constituents.
Etymology
Zero-coupon security comes from the words zero and coupon: there are no small interest 'coupons' to collect on this bond, so you buy it for less and receive the full amount at the end. That's why the name describes a bond with 'no regular interest payments' and a profit only at 'maturity'.