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Author Question: Which one of the following statements correctly describes the major drawback of a zero-coupon bond? (Read 12 times)

ninaj

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on: Mar 29, 2022
Which one of the following statements correctly describes the major drawback of a zero-coupon bond?
◦ Unless the bond is held in a tax-sheltered account, the investor must pay taxes on the annual accrued interest even though no interest is actually received.
◦ The conversion feature found on most zero-coupon bonds generally requires the investor to switch to a coupon-bearing bond after a period of 5 years.
◦ The lack of an annual coupon basically prohibits the investor from locking in a high rate of return.
◦ Because there is no reinvestment of a coupon payment, large capital losses accrue when interest rates decline.
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Marked as best answer by ninaj on Mar 29, 2022

Spike8502

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Reply #1 on: Mar 29, 2022
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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ninaj

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Reply 2 on: Mar 29, 2022
YES! Correct, THANKS for helping me on my review

xthemafja

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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