Which One of the Following Statements Correctly Applies to STRIPS

question 62

Multiple Choice

Which one of the following statements correctly applies to STRIPS?

• A) STRIPS securities pay a fixed-rate, semiannual interest payment.
• B) A 10-year T-bond is broken into 20 STRIPS securities.
• C) Treasury securities are broken into STRIPS securities by brokers.
• D) STRIPS securities pay a variable-rate, semiannual interest payment.
• E) All STRIPS securities taken from the same Treasury security must be registered to the same owner.

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Definitions:

Quantity of Y

A term indicating the amount or volume of a product or commodity denoted by 'Y', often measured in units or quantities.

Downsloping Demand Curve

Illustrates the inverse relationship between the price of a good or service and the quantity demanded, indicating that demand decreases as price increases.

Budget Line

A graphical representation showing the combination of two goods that a consumer can purchase with a given budget at prevailing prices.

Money Income

The total cash earnings received by an individual or household, including wages, salaries, benefits, and income from investments.