SIE Exam Question 481: Answer and Explanation

Question: 481

An investor has a conservative attitude towards investing and is seeking to invest $50,000 into an interest-bearing instrument that will provide current income and safety. You would most likely recommend which of the following?

• A. Ginnie Mae pass-through certificate.
• B. Bankers' acceptance.
• C. Treasury bill.
• D. Treasury STRIP.

Correct Answer: A

Explanation:

A: Of all the investments listed, only the Ginnie Mae pass-through certificate will provide income. Ginnie Mae pass-through certificates pay monthly interest and principal payments.