New SIDBI Grade A New Batch Starts on Nov 18

    Register

    Question

    Which of the types of bonds are in the nature of zero-coupon bonds?

    A.     Sovereign Gold Bonds

    B.     Oil Bonds

    C.     Treasury Bills

    D.     Cash management Bills

    A A and B Correct Answer Incorrect Answer
    B B and C Correct Answer Incorrect Answer
    C C and D Correct Answer Incorrect Answer
    D A and D Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Zero coupon bonds pay no periodic coupon, rather they are issued at a discount and redeemed at full face value. The difference in discounted issue price and face value accounts for the return on these bonds. Treasury bills and cash management bills issued by GoI are short term, money market bonds which are issued in such form.

    Practice Next