Do You Know: Various Instruments of Financial Market

by Vinodh Reddy

Zero Coupon Bonds (ZCB)
Zero Coupon Bonds (ZCB) are issued at a discount to face value. They don’t provide for any payment of interest during the currency of the bond but it pays the face value in the maturity. For example a bond of face value of Rs. 100 can be issued at Rs. 90, at the time maturity, bond holder will be paid Rs. 100 only. These bonds are popularly called as Zeros.

Deep Discount Bond (DDB)
Deep Discount Bond (DDB) is similar to Zero Coupon Bonds (ZCB), but the difference may be that DDB are issued to at deep (more) discount to the face value and can have not necessarily longer period of maturity.

Sweat Equity Share
Sweat Equity Share is the share which can be issued to the employers and directors of the company at a discount; or the shares issued for consideration other man cash for providing know-how or making available rights in the nature of intellectual property rights or value additions may called as Sweat Equity Shares.

Global Depository Receipts (GDRs)

American Depository Receipts (ADRs)

Euro Convertible Bonds (ECB)

Mutual Funds (MFs)