The STRIPS are used effectively to receive?
Correct answer: A. One set of payment
- A. One set of payment
- B. Two sets of payments
- C. Three sets of payments
- D. Four sets of payments
Explanation
STRIPS separate a bond’s principal and coupon payments, allowing an investor to receive a single payment at maturity from each stripped security. They are therefore used as zero-coupon investments providing one set of payments.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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