Which of the following book-entry securities results from the separation of the interest and principal portions of marketable U.S. Treasury securities?

Book-entry securities refer to financial instruments that are recorded electronically, rather than issued in physical form. In the context of U.S. Treasury securities, the term that specifically describes the separation of the principal and interest payments of marketable U.S. Treasury securities is known as STRIPS, which stands for Separate Trading of Registered Interest and Principal of Securities.

When U.S. Treasury securities are "stripped," the future interest payments and the principal repayment are separated into individual securities. Each interest payment becomes its own zero-coupon bond that matures on the schedule of the interest payments, while the principal amount can also be treated as a separate bond that matures at the end of the term. This allows for separate investment in the interest or principal, providing flexibility for investors who may have different cash flow needs.

T-Bills, TIPS, and futures do not fit this description. T-Bills are short-term securities that do not pay interest but are sold at a discount to face value. TIPS, or Treasury Inflation-Protected Securities, pay interest that is adjusted for inflation. Futures are financial contracts obligating the buyer to purchase an asset at a predetermined future date and price, not related to the stripping process of Treasury securities. Hence, STRIPS are