Which Type of Investor Would Be Most Likely to Purchase

question 62

Multiple Choice

Which type of investor would be most likely to purchase zero coupon bonds?

• A)Retired individuals seeking income for current consumption.
• B)Individuals in high tax brackets.
• C)Tax free investors such as pension funds.
• D)Risk averse individuals anticipating increases in interest rates.
• E)None of the above.

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Definitions:

Loanable Funds

The money available for borrowing in the financial markets, influenced by interest rates and economic conditions.

Useful Life

The period during which an asset is expected to be usable for its intended purpose.

Interest Rate

The cost of borrowing money or the return on invested capital, typically expressed as a percentage of the principal amount per period.

Loanable Funds

The funds available in the financial markets for lending and borrowing.