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      Question

      In financial markets, what does the acronym STRIPS

      (often misspelled as STIRPS) stand for?
      A Statutory Trading of Registered Interest and Principal Securities Correct Answer Incorrect Answer
      B Separate Trading of Registered Interest and Principal of Securities Correct Answer Incorrect Answer
      C Standard Transactions of Regulated Interest and Principal Shares Correct Answer Incorrect Answer
      D Sovereign Trading of Retail Interest and Principal of Securities Correct Answer Incorrect Answer
      E Systemic Transfer of Registered Interest and Principal Securities Correct Answer Incorrect Answer

      Solution

      STRIPS is a process where the interest and principal components of a government bond are separated (stripped) and sold individually as zero-coupon bonds.

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