Question
Why does a zero-coupon bond have no periodic reinvestment risk from coupons?
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Answer
It makes no interim coupon payments.
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Question
Why does a discount bond move toward par as maturity approaches?
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Answer
Pull to par: less time remains for discounting differences.
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Question
If a bond is callable, which side benefits from the embedded option when yields fall?
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Answer
The issuer benefits by refinancing at lower rates.
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Question
How does a deferred-coupon structure change the timing of investor cash receipts?
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Answer
No initial cash interest; payments begin later.
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