Zero-coupon bonds offer higher return potential compared to other types of bonds because they are issued at a discount to their face value

The difference between the purchase price and the face value represents the implied interest rate 

Therefore, if an investor buys a zero-coupon bond at a deep discount, the return at maturity will be much higher than the purchase price 

This makes zero-coupon bonds an attractive investment option for those looking to maximize their return potential 

Since zero-coupon bonds do not pay periodic interest payments, they are less exposed to interest rate risk compared to other types of bonds 

Interest rate risk is the risk that the value of a bond will decrease as interest rates rise 

With zero-coupon bonds, the price is determined at the time of purchase and will remain the same until maturity 

Therefore, investors do not have to worry about fluctuations in interest rates affecting the value of their investment