Recently, the Power Finance Corporation withdrew its plan to issue zero-coupon bonds due to weak investor demand. Zero-coupon bonds are debt instruments that do not pay regular interest but are sold at a discount and redeemed at full face value on maturity. Also called discount bonds, they offer a lump sum payment at maturity, making their market price more volatile than regular coupon bonds. They suit both long-term and short-term investment goals and are seen as less risky since investors hold them till maturity. However, they do not provide regular income and are mainly suitable for long-term investors.
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