A Fixed-Income Security Pays ____________

question 12

Multiple Choice

A fixed-income security pays ____________.

• A) a fixed level of income for the life of the owner
• B) a fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security
• C) a variable level of income for owners on a fixed income
• D) a fixed or variable income stream at the option of the owner
• E) a riskless return that is fixed for life

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Definitions:

Arithmetic Average

A statistical measure of central tendency calculated by summing a set of values and dividing by the number of values in the set.

Geometric Average

A method of calculating the average rate of return that accounts for compounding, commonly used for investment portfolios.

Total Returns

Total returns include all sources of investment return including capital gains, dividends, and interest, measured over a specific time period.

Variance

A statistical measure of the dispersion of data points in a data series around the mean.