{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Essay Question #4 - James Wallace BUS 404 MW Essay Question...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
James Wallace BUS 404 MW Essay Question # 4 As an investor, there are a variety of instruments out there that offer a vast range of risk and reward. A good investor will always diversify an investment portfolio in order to reduce his/her exposure to risk. Investing in bonds provides predictable income and a promise of repayment of principal. In today’s economy this can be a comforting idea for an investor. Like any other investment product bonds do have drawbacks. Sometimes bonds can fail to keep up with inflation, in which case the investor will have less purchasing power for the same interest payment that they may have assumed to be equal. For someone who is retired and relying on their interest income to purchase basic necessities, this could be a big problem. In 1997, the U.S. Treasury began issuing inflation- indexed bonds. These bonds provided returns that were tied to inflation rates. By changing the face value of the bond every six months to correspond with inflation rates the
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern