Talk:Zero-coupon bond

From Wikipedia, the free encyclopedia

 This article is part of WikiProject Finance, an attempt to better organize information in articles related to Finance. If you would like to participate, you can edit the article attached to this page, or visit the project page, where you can join the project and/or contribute to the discussion.
Stub This article has been rated as Stub-Class on the project's quality scale.
(If you rated the article please give a short summary at comments to explain the ratings and/or to identify the strengths and weaknesses.)
To-do list for Zero-coupon bond: edit · history · watch · refresh

Here are some tasks you can do:
    Priority 4  

    Contents

    [edit] Definition

    And what is a Zero-coupon bond? The article doesn't seem to say. ---mav

    It's a bond that pays no coupon. It is a discount bond, which means you pay less than par for it, and redeem it at par. The difference between the price and the par value of the bond makes up for the interest owed to the bondholder. Finnancier 12:54, 1 July 2007 (UTC)

    [edit] History

    I took out the history section. All it said that "This market was started in 1982" (??!!). I don't know how you could say when this market started but a more detailed history of the modern market might be interesting.

    [edit] Not clear

    not unble to get the exact mechanism. Can any one clarify how issuer gains from these bonds

    To the issuer, these bonds are no different from a regular bond: in fact, they're the same bond. So the mechanism basically (very basically) is this: Someone buys the bond from the issuer, then re-sells the coupons to one party and the stripped part to another.
    Because the bondholder buys the bond at a discount, the issuer has to pay the par value at redemption. Finnancier 12:54, 1 July 2007 (UTC)

    [edit] Merge to Bond (finance) ????

    Somebody put on a merge tag to merge this into the general bonds article, but hasn't bothered explaining or starting a discussion anywhere.

    Absolutely disagree - this strikes me as logical as merging Cleveland Indians into Baseball, except that when it comes down to it zero coupons are much more important than the Cleveland Indians. Smallbones (talk) 22:41, 17 November 2007 (UTC)
    Disagree - Yeah, a merge is a bad idea. Zero-coupon bonds can and should stand on their own. If the tag's still there in a week I'll probably remove it. -FrankTobia 16:02, 30 November 2007 (UTC)
    I got tired of waiting, and removed the merge tags. We can re-open the discussion if anyone objects. -FrankTobia 17:18, 3 December 2007 (UTC)