Trading Zero Coupon Bonds

To understand why consider the time value of money time value of money the time value of money is a basic financial concept that holds that money in the present is worth more than the same sum of money to be received in the future.

Trading zero coupon bonds. Government won t sell zero coupon bonds to bank indonesia. A coupon bond always has a lower duration. Zero coupon bonds or zeros don t make regular interest payments like other bonds do.

To view our bonds on line trading system please click here. A zero coupon bond is a debt security that doesn t pay interest a coupon but is traded at a deep discount rendering profit at maturity when the bond is redeemed for its full. As a zero coupon bond does not pay periodic coupons the bond trades at a discount to its face value.

Adrian wail akhlas the jakarta post jakarta wed june 24 2020 04 34 pm. Strip bonds are normally available from investment dealers maturing at terms up to 30 years. A zero coupon bond always has a duration equal to its maturity.

To find out more about zero coupon bonds either call our office at 855 846 acap fill out our brief contact form or email us at email protected. The impact of interest rate fluctuations on strip bonds known as the bond duration is higher than for a coupon bond.