Question

Why are bonds known as fixed income investments?

there is a fixed principle

there is a fixed rate of return

there is a fixed option of investing part of the bond

all of the above

Answer 1

Answer: B - there is a fixed rate of return

Step-by-step explanation:

I took the test (:

Answer 2

Option D. All of the above

Step-by-step explanation:

The reason is that on a fixed income investment, there are periodic income payments with agreed fixed interest rate. So the borrower also promise to make the full repayment of the principal in most of the cases and there are sometimes (not always) option to convert the amount lent into shares. The principal payment always fixed because the investor receives it either in the form of greater rate of returns or all of it in the form of principal repayment. This is agreed with the lender, So all the options are correct here. Option D is the right answer.