What is zero bond in SAP FIN-FSCM-TRM-TM - Transaction Manager?

SAP Term: zero bond

• Component: FIN-FSCM-TRM-TM

• Component Name: Transaction Manager

• Description: Bond for which no interest is paid during the term. The interest revenueis included in the redemption rate. Zero bonds are usually issued with a discount and redeemed at 100%.

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• Key Concepts: 
  Zero bond is a type of financial instrument used in SAP Transaction Manager (TM). It is a type of bond that has no coupon payments and is issued at a discount to its face value. The issuer pays the face value of the bond at maturity. 
  
  How to use it: 
  In SAP TM, zero bonds are used to manage the risk associated with foreign exchange transactions. They are used to hedge against currency fluctuations and can be used to finance long-term investments. They can also be used to manage liquidity and provide a source of capital for companies. 
  
  Tips & Tricks: 
  When using zero bonds in SAP TM, it is important to consider the maturity date of the bond and the currency in which it is denominated. It is also important to consider the creditworthiness of the issuer and the interest rate environment. 
  
  Related Information: 
  Zero bonds are similar to other types of bonds such as treasury bonds, corporate bonds, and municipal bonds. They can also be compared to other financial instruments such as derivatives and swaps.