Al Is Retired and Enjoys His Daily Life

question 62

Multiple Choice

Al is retired and enjoys his daily life.His one concern is that his bonds provide a steady stream of income that will continue to allow him to have the money he desires to continue his active lifestyle without lowering his present standard of living.Although he has sufficient principal to live on,he only wants to spend the interest income provided by his holdings and thus is concerned about the purchasing power of that income.Which one of the following bonds should best ease Al's concerns?

• A)6-year, putable, high coupon bond
• B)5-year TIPS
• C)10-year AAA coupon bond
• D)5-year municipal bond
• E)7- year income bond

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Definitions:

Cretinism

A chronic condition caused by lack of thyroid secretion during fetal development and early childhood; results in physical and intellectual disability if untreated.

Mental and Physical Development

The process of growth and change in intellectual and bodily abilities and capacities throughout life.

Stressful Situations

Refers to scenarios or conditions that cause stress or emotional strain in individuals or groups.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, responsible for the fight-or-flight response in mammals.