Series 7 - General Securities Representative Exam

Preview Mode

All of the following are TRUE about Treasury STRIPS EXCEPT

The security’s principal and interest is paid at maturity
A
The security’s interest is paid semiannually and the principal is paid at maturity
B
Investors must pay tax on interest earned annually
C
They are zero-coupon securities issued by brokerage firms and based on receipts for Treasury securities
D

Explanations

Treasury STRIPS are issued at a discount and mature at par value; therefore, the interest accrues but isn’t paid until maturity

Pricing