Consider the security composed of one insured Canadian coupon payment receivable in twelve months as a typical example of a riskless zero-coupon bond. The one-year market discount rate established by today's sales and purchases of this security can be defined in plain English as: the value of a current dollar as measured in dolars receivable in twelve months the number of twelve month dollars which have equivalent value to one current dollar the net monthly coupon rate y on the underlying mortgage from which the single twelve month coupon payment is sold the number of current dollars required to purchase one dollar receivable in twelve months one plust the net coupon rate (1 + ) on the underlying mortgage from which the single twelve month coupon payment is sold