If You Want to Increase Your Purchasing Power by Investing

question 63

Multiple Choice

If you want to increase your purchasing power by investing in a bond,then:

• A)you must purchase that bond at a discount.
• B)the nominal rate of return on that bond must be less than the inflation rate.
• C)you should purchase a premium bond.
• D)the nominal rate of return must equal or exceed the rate of inflation.
• E)you must earn a positive real rate of return on that bond.

Analyze the impact of market interest rates on bond values, particularly in comparison scenarios.

Define and differentiate between various types of bonds based on payment and structure.

Understand the concept of bond ratings and their relevance to investors.

Grasp the fundamentals of bond agreements and the implications of changes in interest rates on bond investments.

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