A stripped security:
A) pays no interest.
B) has no par value.
C) is easier to value than a traditional bond.
D) should sell as a package of zero coupon bonds.
E) None of the above

Question

Quizplus · Accepted Answer

A stripped security is essentially a bond that has had its principal and interest payments separated (or "stripped") into two parts. Each part is sold as a zero coupon bond, which does not pay periodic interest but is sold at a discount to its face value and pays its full face value at maturity. This is why option D is correct.

A Stripped Security