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Separate Trading of Registered Interest and Principal of Securities (STRIPS)

Separate Trading of Registered Interest and Principal of Securities (STRIPS) definition - business

Separate Trading of Registered Interest and Principal of Securities (STRIPS)

Treasury securities that have had their coupons and principal repayments separated into what effectively become zero-coupon Treasury bonds. The components, issued in book-entry form, carry the full backing of the U.S. Treasury. Like other zero-coupon bonds, these securities are subject to wide price fluctuations. They also subject the owner to an annual federal income tax liability even though no direct interest is paid.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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