Course 206: STRIPS
STRIPS Meet the Demand for Zero Coupon Debts
In this course
1 Introduction
2 What Are STRIPS?
3 How Do STRIPS Work?
4 Why Are STRIPS Popular?
5 STRIPS Meet the Demand for Zero Coupon Debts

Now let's review what you have learned.

STRIPS are zero-coupon securities based on U.S. Treasury bills and bonds. Brokerage firms strip the bonds' interest from their principal and issue separate securities based on units of principal or interest. STRIPS permit investors to take advantage of the performance of high-quality Treasury instruments without the risk of bonds being called, and at a much lower cost than purchasing Treasury bills and bonds.

See the other courses on bonds in the Investing Classroom for more types of coupon-stripped securities.

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