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This glossary contains all terms used therein.


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Z

:

v. zero-bond

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see zero-coupon rate

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v. zero-curve

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bond without interim payments of interest,Zero-bonds are issued at a discount to the principal amount. The yield results from the difference between the issue price and the redemption value.

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the yield which result from the investment in a zero-bond, if one holds it till maturity (yield-to-maturity),The advantage of investing in a zero-bond is that the calculated yield can be reached in reality because there is no re-investment-risk, due to the absence of interim coupon payments

:

The zero-curve shows the relation between the maturity and the zero-coupon rate.The zero-curve can be derived from the normal interest curve, by eliminating the interim interest payments.