Zero coupon

can someone guide me on this..
for zero coupon INT.RATE in SM is given as zero and a value is given in the field ISSUE.PRICE N REDEM.PRICE in SM.

Will the system accrue the the discounted amount (redem price - issue price) over the entire period?

If it does which is the live file where i can go n view the accrual amount for zero coupon.?

yes the difference between the redeem price and the issue price is the interest

now this is the scenario....
bank buys a a zero coupon bond on Jan1 which is to be redeemed on Jan10
now assuming the issue price is $90 and redeem price is $100, the difference of $10 is the interest rate.
so after running cob to cross jan1, when the bank reaches jan2, the bank wants the system to show the interest amt of $1 (10 being the tenor days and $10 being the difference)on jan2. it shud do it until 9th jan and on 10th jan the bank gets the entire redemption amt.

I am not sure whether what i just stated is known as accruing of interest or ammortization of inetrest.can u just confirm on this and if the bank wishes to see this $1 as stated earlier, what set ups do i need to make. Is the set up in SECURITY.MASTER or in SEC.ACC.MASTER???

Dear sureshas,

After seeing your post only I tried to explore on this.

While going through the user guide Securities Administratiion, able to find the set ups required under the heading Accrual and Amortisation of Discount and Premium. Following are the files in which you have to do set ups,

PRICE.TYPE
SEC.ACC.MASTER
SECURITY.MASTER

Kindly check the user guide for more information.

Thanks to jpb for explaining it.

thanks a lot jpb n durai :) m slowly getting a grip on it
of all the most important set ups seems to be PRICE.TYPE

many thanks again....