: A standard bond is "stripped" into its principal repayment and its individual interest (coupon) payments.
: Even though no cash interest is paid until maturity, the annual increase in the strip's value is often taxed as "phantom income" unless held in a tax-deferred account like an IRA. Strategic Use Cases matures strips
: They can be used to build "bond ladders," where different strips mature at regular intervals to provide steady cash flow. : A standard bond is "stripped" into its
: Investors use STRIPS to match the maturity date exactly with a future financial obligation. consult a professional. Learn more
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