Multiple Choice
If the value of a Treasury bond was lower than the value of the sum of its parts (STRIPPED cash flows) , you could
A) profit by buying the stripped cash flows and reconstituting the bond.
B) not profit by buying the stripped cash flows and reconstituting the bond.
C) profit by buying the bond and creating STRIPS.
D) not profit by buying the stripped cash flows and reconstituting the bond and profit by buying the bond and creating STRIPS.
E) None of the options are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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