Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities) are zero-coupon securities. They are created by separating the interest and principal payments of Treasury bonds and selling them as individual securities. This allows investors to buy the interest and principal components separately, which can be useful for certain investment strategies.

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Treasury STRIPS Are

Question 44

Multiple Choice

Treasury STRIPS are:

A) zero-coupon bonds issued by the U.S. Treasury with maturities of one year or less.
B) currently quoted in 32^nd^s of a dollar.
C) zero-coupon securities.
D) a type of mortgage bond.
E) coupon securities created from the interest and principal payments of Treasury bonds.

Correct Answer: