Which of the following would be most suitable for funding a college education that commences in three years?

Question

Quizplus · Accepted Answer

A zero-coupon bond with a maturity that matches the start date of college education would be the most suitable option for funding a college education that commences in three years. This is because it is a low-risk investment that guarantees a fixed payout at maturity, which can be used to pay for tuition fees. Stock or bond mutual funds are riskier investments and their value may fluctuate, making it difficult to predict the amount of money that will be available when the college education starts. A checking account at the local bank does not offer any interest, so it would not be a wise choice for long-term savings.

Which of the Following Would Be Most Suitable for Funding