Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'strip'?

A. a strip that represents the non-principal portion of the monthly payments on the underlying debt instrument, such as a bond
B. a strip that represents the principal portion of the monthly payments on the underlying debt instrument, such as a bond
C. a tradeable debt instrument created either through the process of removing coupons from a bond and then selling the separate parts as a zero coupon bond and an interest paying coupon bond or through taking the opposite position from some variant in the options market
D. tradeable debt instrument that provide their owners with a rate of return that is dynamic and determined by market forces

Answer: a tradeable debt instrument created either through the process of removing coupons from a bond and then selling the separate parts as a zero coupon bond and an interest paying coupon bond or through taking the opposite position from some variant in the options market