Consider the following assets: I.Treasury Strips,II.Coupon Treasury bonds,III.growth stocks,and IV.medium quality corporate bonds.A cautious investor with high-priority future goals,but who does not need current income,would prefer
A)I.
B)II.
C)III.
D)IV.

Question

Quizplus · Accepted Answer

Treasury Strips are zero-coupon bonds that are backed by the US government, making them one of the safest investment options. Since the cautious investor does not need current income and has high-priority future goals, Treasury Strips would be the best choice as they offer a guaranteed return at a later time. Coupon Treasury bonds pay interest regularly and would not fit the cautious investor's preference for a low-risk investment. Growth stocks and medium quality corporate bonds are riskier investments that may offer higher returns, but do not meet the criteria for a cautious investor.

Consider the Following Assets: I