Treasury STRIPS are:

Question

Quizplus · Accepted Answer

Treasury STRIPS are created by separating the principal payments and coupons of Treasury notes and bonds. They are essentially a zero coupon bond, where the investor purchases the bond at a discount to its face value and receives the full face value upon maturity. They do not have maturities of one year or less, as stated in option A, nor are they quoted in 32nds of a dollar, as stated in option B. They are not a type of mortgage bond, as stated in option D, nor are they coupon securities, as stated in option E.

Treasury STRIPS Are