Bonds that does not pay any interest rate are considered as

A. interest free bond

B. zero coupon bond

C. price less coupon bond

D. useless price bonds

Answer: Option B

Solution(By Examveda Team)

Bonds that does not pay any interest rate are considered as zero coupon bond. A zero-coupon bond is a debt security instrument that does not pay interest. Zero-coupon bonds trade at deep discounts, offering full face value (par) profits at maturity. The difference between the purchase price of a zero-coupon bond and the par value, indicates the investor's return.