Treasury STRIPS Are Most Similar to Which Type of Corporate

question 71

Multiple Choice

Treasury STRIPS are most similar to which type of corporate security?

• A)preferred stock
• B)premium bond
• C)high-yield bond
• D)zero-coupon bond

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Definitions:

Upkeep

The process of maintaining or preserving someone or something, or the cost involved in maintaining a property, equipment, etc.

Depreciation Tax Shield

A reduction in taxable income for businesses that results from the allowance for depreciation expenses.

CCA Class

Stands for Capital Cost Allowance Class, which is a categorization used in Canadian tax law for the purpose of calculating depreciation for tax purposes.

Borrowed Money

Funds that are loaned to an individual or business with an obligation to repay the amount plus interest.