Question : Which of the following statements is not true?
Option 1: Coupon rate is a specified interest rate payable on debenture.
Option 2: Zero Coupon Bonds are issued with a specified interest rate.
Option 3: Deep Discount Bonds are issued at a price substantially below the maturity value.
Option 4: In India, debentures issued by Companies have necessarily to be secured.
Correct Answer: Deep Discount Bonds are issued at a price substantially below the maturity value.
Solution : Answer = Deep Discount Bonds are issued at a price substantially below the maturity value.
Deep Discount Bonds are issued at a significantly discounted price but not necessarily below the maturity value. The discount reflects the difference between the issue price and the face value of the bond. Zero Coupon Rate Debentures (Bonds) are those debentures that do not carry a specific rate of interest.
Hence, the correct option is 3.