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                         What is a zero coupon bond?                                                                         
                                    A zero-coupon bond is bought at a discount to its face value.  A zero-coupon bond does not make any interest payments for the life of the bond.  At maturity, the investor receives the face value of the bond.  The difference between the face value of the bond and the discounted price represents the interest that is received.  There are certain tax implications.  Every year, a specific amount of interest must be reported on your tax form as income even though it was never received.  This is known as phantom income.