The financial world has developed a special investment-oriented language to help describe the stock market, investments, securities for the stock market, stock market analysis, and its conditions. At times you may be confronted with a term which is totally alien or has a completely different meaning from what you thought. Misunderstanding these terms can sometimes lead to the wrong conclusion, and that can cost you money!
What you don't know can hurt you.
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Zero-Coupon Bond
A bond that, instead of paying interest, is sold at a deep discount. You get the face value at maturity, and the difference between the two is the yield. Mostly these are Treasury securities. Zeros, as they are known, have some advantages: you can buy one today that matures when your child is ready for college and know exactly how much money you will have. Zeros pay slightly higher interest than regular bonds, too.
The financial world has developed a special investment-oriented language to help describe the stock market, investments, securities for the stock market, stock market analysis, and its conditions. At times you may be confronted with a term which is totally alien or has a completely different meaning from what you thought. Misunderstanding these terms can sometimes lead to the wrong conclusion, and that can cost you money!
