Which of the following return objectives is most likely the primary objective given a 70 yearold widow who owns a portfolio comprised of 100% Treasury bonds?
A) Current income.
B) Capital preservation.
C) Capital appreciation.
the answer is B , but i guess the answer shoud be A
as capital preservation is an appropriate goal when funds will be needed in the near future , plus fixed income securities provide a fixed coupon , ie; current income to supplement sources of income to meet living expenses . thats what i understand , am i missing anything ?作者: leadcfa 时间: 2013-4-8 12:41
I think NByz answer is right to the point. In addition, she is already 70 years and might have a withdrawal plan/retirement plan which will give here a neutral balance, say, at 90, to cover living expenses. To meet that target the funds primarily need preservation, any income is nice, but not strictly required. A current income objective is very unlikely a recommended investment objective give here age.作者: YAhmed 时间: 2013-4-8 12:41
