Solid Rock Fund invests in long-term high quality corporate fixed-income securities. Investors would most likely be...

Solid Rock Fund invests in long-term high quality corporate fixed-income securities. Investors would most likely be attracted to this fund during times of:

A. High equity returns.

B. High inflationary periods.

C. Falling interest rates.

D. Concentrated sector bankruptcies.

Solutions

Expert Solution

Option B is correct. High inflation periods means that the nominal rate will be high which means that the yields of the fixed income securities will be high hence that will be the time when investors will be attracted to them the most. Other scenarios mentioned are not favorable to fixed income investments.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

"An individual with a passive approach invests in securities for the long term, while the person...

"An individual with a passive approach invests in securities for the long term, while the person with an active approach seeks to take advantage of market inefficiencies." Which investment strategy do you prefer - active or passive? Compare the two strategies and explain why you prefer one over other

Most investors will make their fixed income (bond) investments through a bond fund. This snapshot of...

Most investors will make their fixed income (bond) investments through a bond fund. This snapshot of a popular bond index fund will help you understand how a bond fund works. Use this very popular fund, the Vanguard Total Bond Market Index Fund Investor Shares (VBMFX) to answer the questions below. *All answers stem from the Overview tab. What is the level of risk with this investment? What types of bonds does this fund hold? How many bonds are held in...

Assume that annualized yields of short-term and long-term securities are equal. If investors suddenly believe interest...

Assume that annualized yields of short-term and long-term securities are equal. If investors suddenly believe interest rates will increase, their actions may cause the yield curve to Group of answer choices a.be unaffected. b.become flat. c.become upward sloping. d.become inverted.

1. A(n) ________________ mutual fund invests funds in short-term securities like Treasury bills, jumbo CDs, and...

1. A(n) ________________ mutual fund invests funds in short-term securities like Treasury bills, jumbo CDs, and commercial paper. A. REIT B. hybrid fund C. closed-end investment company D. equity mutual fund E. money market mutual fund 2. A(n) __________________ has customer demand for the shares determining the number of shares outstanding. A. general partnership B. limited partnership C. open-end D. REIT E. closed-end 3. A no-load mutual fund: A. has zero operating expenses. B. is typically marketed directly to customers,...

Which of these risks would most likely be a diversifiable risk for investors? A. The US...

Which of these risks would most likely be a diversifiable risk for investors? A. The US dollar strengthens, making exports more expensive for non-US customers B. Congress passes legislation that raises the corporate tax rate. C. A hurricane damages factories near the Gulf Coast. D. The Federal Reserve increases the interest rate.

A long-term investor who searches for protection against rising consumer prices would most likely purchase a:...

A long-term investor who searches for protection against rising consumer prices would most likely purchase a: a. U.S. Treasury bond b. Mortgage-backed security c. U.S. Treasury inflation protection security d. Equity shares in a financial institutio Uncle Robbie, who does not have a margin account, bought a Treasury bond on the secondary market that has 10 years until maturity and a 2% coupon payment, paid semi-annually. Which of the following risks is he subject to? a. Financial risk b. Exchange...

“Convexity is something which investors are looking to pay for.” Explain the term Convexity in fixed-income...

“Convexity is something which investors are looking to pay for.” Explain the term Convexity in fixed-income securities and discuss its implications on investment decisions. please try to concentrate more on the implications on investment decisions

An investment fund has the following assets in its portfolio: $52 million in fixed-income securities and...

An investment fund has the following assets in its portfolio: $52 million in fixed-income securities and $52 million in stocks at current market values. In the event of a liquidity crisis, it can sell its assets at a 91 percent discount if they are disposed of in two days. It will receive 93 percent if disposed of in four days. Two shareholders, A and B, own 5 percent and 7 percent of equity (shares), respectively. a. Market uncertainty has caused...

Explain why an ETF fund would be suitable for long term investments and why woukd an...

Explain why an ETF fund would be suitable for long term investments and why woukd an ETF fund not be suitable for ling term investing. Include examples

Cash outflows to purchase available-for-sale securities on a long-term basis would be reported in the investing...

Cash outflows to purchase available-for-sale securities on a long-term basis would be reported in the investing section of the cash flow statement. Question 25 options: a) True b) False Question 26 (1 point) A cash flow statement starts with net income and adds (or deducts) items that did not affect cash to arrive at net cash provided by operating activities if the indirect method is used. Question 26 options: a) True b) False Question 27 (1 point) Saved The issue...

Subjects