Word of the DayFutures Terms that begin "Z"
Zero Coupon
Refers to a debt instrument that does not make coupon payments, but, rather, is issued at a discount to par and redeemed at par at maturity.
Zero-Coupon Bond
This type of bond matures at its face value, is sold at a deep discount to its face value and pays no coupons. The key advantage of this type of bond is that there is no reinvestment risk, although there is the draw back of not being able to benefit from a rise in market interest rates.