ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    In June 2025, RBI allowed STRIPS trading to state

    government bonds meeting certain residual maturity and outstanding amount requirements . Which of the following is the correct full form of STRIPS? ┬а
    A Separate Trading of Reserved Interest and Principal of Securities Correct Answer Incorrect Answer
    B Separate Trading of Restructured Interest and Principal System Correct Answer Incorrect Answer
    C Separate Trading of Reserved Interest and Principal of System Correct Answer Incorrect Answer
    D Separate Trading of Registered Interest and Principal of Securities Correct Answer Incorrect Answer
    E Separate Trading of Restricted Interest and Principal System Correct Answer Incorrect Answer

    Solution

    STRIPS stands for Separate Trading of Registered Interest and Principal of Securities . These are securities created by convert ing a bondтАЩs periodic coupon payments and the principal into individu al l zero-coupon instruments. Each of these can be traded separately, allowing investors to buy specific cash flows instead of the entire bond. For example, a 10-year SDL offering annual interest of Rs 70 and repaying Rs 1, 000 in principal at maturity could be split into eleven separate securities - ten тАп interest payments and one principal payment.

    Practice Next
    More Current Financial Awareness Questions
    ask-question