Final answer:
A stripped security refers to a security where the interest and principal payments are sold separately.
Step-by-step explanation:
The correct answer is d. Stripped security. A security where the interest payments and the principal payments are sold separately is known as a stripped security.
For example, a Treasury bond can be stripped into individual interest payments (coupon payments) and the principal payment, which can then be sold separately in the financial market. This allows investors to purchase different parts of the security based on their investment preferences.