Zero Coupon Bond: Definition, Formula & Example

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question 1 of 3

Which formula gives the target price to pay for a zero coupon bond based on desired annual yield?

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1. Which of the following is TRUE about a zero coupon bond?

2. Why does the calculation for zero coupon bond prices use semi-annual periods instead of annual periods?

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About This Quiz & Worksheet

Using the quiz and worksheet, you can find out how much you know about the zero coupon bond. Its meaning and formula are topics you need to know for the quiz.

Quiz & Worksheet Goals

Take the quiz to check your understanding of:

  • Formula used to calculate the target price of a bond
  • Why the calculation of zero coupon bond prices use semi-annual periods instead of annual periods
  • Formula that gives us the target price to pay for a zero coupon bond based on our desired annual yield
  • How a zero coupon bond works

Skills Practiced

  • Reading comprehension - ensure that you draw the most important details from the lesson on the zero coupon bond
  • Information recall - access the knowledge you have gained about how long it takes for a zero coupon bond to reach its maturity date
  • Knowledge application - use your knowledge to answer questions about different bond formulas

Additional Learning

You can gain additional knowledge about this type of bond thanks to the lesson, Zero Coupon Bond: Definition, Formula & Example. Objectives you can complete include:

  • Understand how the price of zero coupon bonds is determined
  • Review attributes of a zero coupon bond
  • Learn how to calculate the zero coupon bond
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