Question

2.

A fixed-income security is defined as:

A.

a debt obligation that pays a fixed rate of return for a one-year period of time.

B.

common or preferred stock that pays a fixed annual dividend.

C.

a long-term debt obligation that pays scheduled fixed payments.

D.

long-term debt issued solely by a federal or state government.

E.

any security originally issued as either debt or equity that pays a fixed, pre-set payment.

Answer 1

Option E is correct

Fixed income security is defined as any security issued as either debt or equity that pays a fixed, pre-set payment

> debt obligation that pays a fixed rate of return for a one-year period of time is not fixed income security

> common or preferred stock that pays a fixed annual dividend. - is one of the fixed income security

> a long-term debt obligation that pays scheduled fixed payments. - is fixed debt payment

> long-term debt issued solely by a federal or state government - it should have fixed income obligation to become fixed income security not just government bonds