Dear Dewayne,

Thank you for taking the time to read my work and thank you for taking the time to contribute to the discussion.

You are right in pointing out that the borrower issuing zero coupon bonds is obligated to repay the face value of the bond at a time of maturity, but this assumes the borrower’s willingness or ability to repay the bond at such future date.

Thank you for making the point that in some ways this has the “effect” of being a coupon rate, but my intention was to allude to the fact that there are plenty of assets out there which do not pay an effective coupon rate, yet are traded freely.

Again, thank you for taking the time to point out the subtle nuances in the discourse and I appreciate your feedback.

As always, any errors and/or omissions remain strictly my own.

Yours,

Patrick