Which One of the Following Is the Best Example of a Long-Term

question 18

Multiple Choice

Which one of the following is the best example of a long-term goal for a married couple with no children?

• A)Buy a new car
• B)Increase life insurance
• C)Increase savings
• D)Provide for retirement income
• E)Complete college

---

Definitions:

STRIPPED Cash Flows

Cash flows that are separated from their financial instruments in order to be sold as individual securities.

Arbitrage

The simultaneous purchase and sale of an asset in different markets to exploit price differences for a risk-free profit.

Treasury STRIPS

Separate Trading of Registered Interest and Principal of Securities; bonds that are dissected into individual principal and interest payments and sold separately.

Treasury Bond

A long-term government debt security with a fixed interest rate and maturity of more than ten years.