Treasury strips provide return through

Name: Treasury strips provide return through
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Treasury strips provide return through an increase in value over its life. The bond's coupon payments are separated from the principal payment and sold as separate securities, which produce a return when they are redeemed for the full principal amount at maturity. As interest rates fall, the value of the bond increases, so a Treasury strip's return will increase as long as interest rates stay low.

Treasury Strips Provide Return Through