Marty Is Now Retired and Asks for Your Help Choosing

question 20

Multiple Choice

Marty is now retired and asks for your help choosing an investment that will provide a steady source of income. What do you recommend to Marty in this situation?

• A) growth stocks
• B) investment-grade corporate bonds
• C) commodities
• D) high-risk corporate bonds

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Definitions:

Face Value

The nominal value printed on a financial instrument, such as a bond or stock certificate, representing its worth as stated by the issuer.

Bond Interest Paid

The amount paid by the issuer of a bond as interest to the bondholders, usually expressed as a fixed percentage of the principal.

Discount

A reduction from the usual cost of something or the act of lowering the price.

Premium

The amount by which the price of something, especially a financial instrument, exceeds its principal or face value.