{"id":50279,"date":"2025-06-14T13:41:39","date_gmt":"2025-06-14T08:11:39","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=50279"},"modified":"2025-06-14T17:07:19","modified_gmt":"2025-06-14T11:37:19","slug":"zero-coupon-bonds","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/zero-coupon-bonds\/","title":{"rendered":"Zero-Coupon Bonds"},"content":{"rendered":"<h2><strong>Zero-Coupon Bonds Latest News<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Recently, Power Finance Corporation withdrew zero-coupon bonds issuance due to weak investor demand. \u00a0 <\/span><\/p>\n<h2><strong>About Zero-Coupon Bonds<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are a <\/span><b>debt instrument<\/b><span style=\"font-weight: 400;\"> that does <\/span><b>not pay periodic interest<\/b><span style=\"font-weight: 400;\"> but is issued at a discount rate to its face value.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are also <\/span><b>known as discount bonds,<\/b><span style=\"font-weight: 400;\"> are issued at a discount on the bond\u2019s face value and do not pay periodic interest to bondholders.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They offer payment at face value at maturity so <\/span><b>zero-coupon bonds tend to fluctuate<\/b><span style=\"font-weight: 400;\"> in price on the secondary market much more than coupon bonds.<\/span><\/li>\n<\/ul>\n<h2><strong>Advantages of Zero Coupon Bonds<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Varied investment horizon:<\/b><span style=\"font-weight: 400;\"> These bonds suit investors with long-term and short-term investment motives.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Less risky:<\/b><span style=\"font-weight: 400;\"> These bonds are considered less risky than coupon bonds, as the investors have to buy and leave them until maturity.\u00a0<\/span><\/li>\n<\/ul>\n<h2><strong>Disadvantages of Zero Coupon Bonds<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Period:<\/b><span style=\"font-weight: 400;\"> It is only suited for long-term investment purposes. People with short-term motives cannot invest in these bonds.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>No regular income:<\/b><span style=\"font-weight: 400;\"> The investor does not get a fixed, steady income from such bonds.<\/span><\/li>\n<\/ul>\n<h3><strong>What is a Bond?<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A bond is a <\/span><b>financial instrument<\/b><span style=\"font-weight: 400;\"> that promises a fixed return (face value) at the end of a specific period, unlike equity, which has no fixed term or guaranteed returns.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bonds are generally safer investments used to hedge against risks or act as a store of value.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bonds are used by <\/span><b>companies, municipalities, states and sovereign governments<\/b><span style=\"font-weight: 400;\"> to raise money to finance a variety of projects and activities.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><b>Source: <\/b><a href=\"https:\/\/www.business-standard.com\/companies\/news\/pfc-shelves-zero-coupon-bond-issue-again-amid-weak-investor-demand-125060900849_1.html\" target=\"_blank\" rel=\"nofollow noopener\">BS<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Zero-Coupon Bonds are a debt instrument that does not pay periodic interest but is issued at a discount rate to its face value. Read more about Zero-Coupon Bonds Means, Advantages, Disadvantages, News<\/p>\n","protected":false},"author":8,"featured_media":50267,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[21,22,23,843],"class_list":{"0":"post-50279","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-prelims-pointers","9":"tag-upsc-current-affairs","10":"tag-upsc-prelims-current-affairs","11":"tag-zero-coupon-bonds","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/50279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=50279"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/50279\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/50267"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=50279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=50279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=50279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}