"Treasury Zeros" Are Treasury Bonds That Have Been Split or "Stripped

question 73

True/False

"Treasury zeros" are Treasury bonds that have been split or "stripped" into a zero coupon discount Treasury certificate and a series of interest payments (the coupon payments).These bonds are safer than corporate zeros and thus,are very popular with institutional investors such as pension fund managers.

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Definitions:

Foreign Currency Option

A financial contract which grants the owner the option, without being obliged, to convert funds in one currency to another at a set exchange rate on a determined date.

Strike Price

The predetermined price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset or security.

Foreign Exchange Gain

A financial benefit that occurs when the value of foreign currencies increases compared to the home currency, affecting transactions or holdings in foreign currencies.

Dollar Value

The monetary worth or value of something expressed in terms of the U.S. dollar.