zero-coupon security
- noun
- /ˈziːroʊ ˈkuːpən sɪˈkjʊrɪti/
- Specialized
:
valor cero cupón
- 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
126
5.8
A share, bond, or similar item that people buy and sell to invest money
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
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'.