Question

A retired person with $200,000 to invest states that "current income" is her main investment objective. Which of the following would be most suitable?

(A) High yield bonds and growth stocks
(B) Municipal bonds, U.S. Government bonds and corporate bonds
(C) Balanced, small-cap stocks and mid-cap stocks
(D) Limited partnerships, global stocks and gold

Answer 1

The answer is B; Municipal bonds, U.S. Government bonds and corporate bonds

Step-by-step explanation:

For an investor whose primary aim of investing is current income, the best form of investment would be short and mid-term investments, which focuses on government securities and money market instruments. Municipal bonds and government bonds may not offer huge interests or current income, but safety is guaranteed, as an investor is sure of preservation of capital unlike global stocks that fluctuates and high yield bonds without any promise of capital preservation.