Hello Professor I have a quick question, I can't seem to wrap my head around how brokerages make money off stripping a treasury bond. I might be misunderstanding something but if a brokerage breaks down a treasury bond into separate securities and sells those coupons directly to investors. The investors then collect the return on the difference between the initial security price and the price of the coupon at maturity, but where do the brokerages see a return in their investment by doing this?
Professor Farhat.....very well explained. Love the way you explained.
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Excellent lecture!
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Hello Professor I have a quick question, I can't seem to wrap my head around how brokerages make money off stripping a treasury bond. I might be misunderstanding something but if a brokerage breaks down a treasury bond into separate securities and sells those coupons directly to investors. The investors then collect the return on the difference between the initial security price and the price of the coupon at maturity, but where do the brokerages see a return in their investment by doing this?