Multiple Choice QuestionWhich of the following would not be a good choice when investing for investment income?Multiple choice question.corporate bondspreferred stockmunicipal bondsjust any common stock
Question
Multiple Choice QuestionWhich of the following would not be a good choice when investing for investment income?Multiple choice question.corporate bondspreferred stockmunicipal bondsjust any common stock
Solution
The answer is "just any common stock".
Here's why:
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Corporate bonds: These are a good choice for investment income because they offer regular interest payments to investors.
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Preferred stock: This is also a good choice because preferred shareholders often receive dividends before common shareholders.
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Municipal bonds: These are a good choice because they offer interest payments that are often tax-free.
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Just any common stock: This is not necessarily a good choice for investment income. While some common stocks do pay dividends, not all do. Furthermore, the value of common stocks can be volatile, which means they could decrease in value. Therefore, without careful research and consideration, just any common stock would not be a good choice when investing for investment income.
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