A conventional bond is one that makes regular interest payments to bondholders who receive repayment for their principal investment when the bond matures. While short-term zero-coupon bonds, usually called billsgenerally mature in less than one year, long-term investments generally have maturity dates beginning 10 to 15 years after the bond is purchased.
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If we start on December 1, the first two payments are identical to a 6-month and 1-year T-Bill. Banks and banking Finance corporate personal public. In the example, Ben's breaks even and receives no return on its investment.