Zero-coupon bond

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A debt security paying no interest at all. Why would someone buy a bond paying no interest? Because it issued at a discount, that’s why. The interest yield is priced into that discount therefore.

Why a zero-coupon bond and not a note? Because the implied interest rate on discounted note is fixed at issuance, meaning the present value will fluctuate depending on prevailing interest rates and not just the credit outlook for the issuer; it isn’t adjusted to reflect prevailing rates or, in the lingo, floating. A rate of zero is a fixed rate, not a floating rate.

And, by market convention, bonds are fixed rate instruments, where as notes are floating rate instruments.

There you go: you learn something every day.

A bond is a debt security, traditionally bearing a fixed rate of interest, and issued as a stand-alone (rather than off an MTN programme).