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The *zero rate* is a particular type of interest rate that pertains to special type of lending/borrowing contracts represented in Deriscope by the tradable Zero Bond.

In a Zero Bond one party receives a fixed amount of cash at some preagreed future time (maturity) from the other party.

The related *zero rate* cannot be defined without the additional specification of the following 3 conventions, that define how the *zero rate* is calculated:

*'1) '*The Frequency that defines how often the rate generates interest income by being applied on the capital amount applicable at the time when the rate is applied.

*'2) '*The Simple Rate::Compounding that defines how the capital amount on which the rate is applied keeps changing after each rate application.

*'3) '*The DayCount that defines how the length of each time interval is calculated for the purpose of multiplying it with the *zero rate* in order to compute the ensuing interest amount.

For example, the so called *'continuously compounded '**zero rate* for some maturity *T* is defined as the number *r* that satisfies:

*D = exp(-rτ)*, where *D* is the discount factor at time *T* and *τ* is the length of time until *T* in annual units calculated according to some given daycount convention.