SIE Exam Question 369: Answer and Explanation

Question: 369

Investors that purchase high quality fixed income investments for retirement income are most concerned with

  • A. economic risk.
  • B. inflation risk.
  • C. principal risk.
  • D. credit risk.

Correct Answer: B

Explanation:

B - Inflation risk is a major concern for investors who hold portfolios of fixed income investments for funding retirement income. As inflation increases, the purchasing power of their fixed coupon will fall.

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