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Zero Coupon Bond

Which of the following statement(s) is/are incorrect about Zero Coupon Bond:

  1. It is a debt security that does not pay interest.
  2. The difference between a regular bond and a zero-coupon bond is the payment of interest, otherwise known as coupons.
  3. Zero-coupon bondholders do not receive the face value of the bond when it reaches maturity.

Choose the correct answer from the codes given below:

A
1 and 2
B
Only 3
C
2 and 3
D
1, 2 and 5