Question :
The debentures do not carry a specific rate of interest. In order to compensate the investors such debentures are issued at a substantial discount. The difference between the face value and the issue price is the total amount of interest related to the duration of debentures.
Option 1: Zero Coupon Rate Debentures (Bonds)
Option 2: Bearer Debentures
Option 3: Secured Debentures
Option 4: Unsecured Debentures
Correct Answer: Zero Coupon Rate Debentures (Bonds)
Solution : Answer = Zero Coupon Rate Debentures (Bonds)
Zero Coupon Rate Debentures, also known as Bonds, are issued without a specific rate of interest. Instead, they are issued at a significant discount to compensate investors. The difference between the face value and the issue price represents the total amount of interest payable over the duration of the debentures.
Hence, the correct option is 1.