True or False: U.S. Treasury Bills are the most common type of zero coupon bonds.

U.S. Treasury Bills, often referred to as T-Bills, are indeed the most common type of zero coupon bonds issued by the federal government. They are sold at a discount to their face value and do not pay periodic interest like traditional bonds do. Instead, upon maturity, investors receive the face value of the T-Bill. The difference between the purchase price and the maturity value represents the investor's return. This structure aligns with the definition of zero coupon bonds, which are bonds that do not make regular interest payments but are issued at a discount and pay the face value upon maturity.

This characteristic makes T-Bills popular among investors looking for a low-risk investment and a predictable return, reinforcing their status as a widely recognized form of zero coupon bond.