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An investor buying a zero-coupon bond makes money because it is purchased:

ABelow face value
BAbove face value
CExactly at face
DWith a bonus
Answer & Solution
Correct answer: A. Below face value
1. No coupons ever arrive to provide return. 2. The only gain can come from the price paid versus the amount repaid. 3. So it is bought below face value. _Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._
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