What Type of Bond Investor Would Probably Be Least Concerned

question 27

Multiple Choice

What type of bond investor would probably be least concerned about a drop in market interest rates?

• A)Individuals who spend their interest income
• B)Individuals who are building a retirement portfolio
• C)Pension fund managers
• D)All of the above would have cause for concern

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Definitions:

Liquidity

A measure of the ease with which an asset can be converted into money without a significant loss of value.

Significant Loss

A substantial reduction in the value of an asset or a large financial deficit experienced by an individual or entity.

Required Reserve Ratio

The fraction of deposits that banks are legally required to keep as reserves, either in their vaults or with the central bank.

Money Supply

The aggregate volume of currency resources present in an economy at any given time, covering cash, coins, and the funds in checking and savings accounts.