A zero coupon bond, sometimes referred to as a pure discount bond or simply discount bond, is a bond that does not pay coupon payments and instead pays one lump sum at maturity. To find the zero coupon bond's value at its original price, the yield would be used in the formula.Yield percentage is calculated so that, no matter what the price at which the bond is resold, the coupon amount remains the same. So, the profit for a reseller of a treasury bond is the coupon interest accrued till he sells it, plus the extra profit he makes if the bond is sold at a premium. Treasury bonds give you two different opportunities.
Zero Coupon Bond (Definition, Formula, Examples, Calculations) COUPON (1 days ago) The difference between the current price of the bond, i.e., $463.19, and its Face Value, i.e., $1000, is the amount of compound interest that will be earned over the 10-year life of the Bond..