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Which of the Following Statements About STRIPs Is True

Question 23

Multiple Choice

Which of the following statements about STRIPs is true?


A) STRIPs are sold directly by the Treasury Department
B) When a STRIP is created, all interest payments become one security and the principal payment becomes the other.
C) Many small investors prefer STRIPs because they require a lower minimum investment than original Treasury notes and bonds.
D) Treasury securities dealers create STRIPs because they expect to sell the created zero-coupon securities for more than what they paid for the original Treasury security.
E) None of the above statements is true.

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