Pure discount bonds, which are created by separating the interest and principal payments from U.S. Treasury bonds, are called U.S. Treasury:
A)notes.
B)bills.
C)STRIPS.
D)SWAPS.
E)tax-exempts.

Question

Quizplus · Accepted Answer

U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities) are created by separating the interest and principal payments from U.S. Treasury bonds, resulting in the creation of pure discount bonds. They are sold at a discount to their face value and do not pay periodic interest payments.

Pure Discount Bonds, Which Are Created by Separating the Interest