A 50-year old customer is in a very low tax bracket. She lives in a state that has one of the highest income tax rates. The customer is seeking income and preservation of capital. She has a 10 year investment time horizon. The best r
ecommendation would be a 10 year maturity:__________

a. Treasury Bond
b. investment grade corporate bond
c. investment grade municipal bond
d. Treasury STRIPS

Respuesta :

Answer:

b. investment grade corporate bond

Explanation:

Credit rating is used to show the reliability of a security. The Investment Grade is a credit rating the is low risk bond. There is low possiblity of default on this type of investment.

Medium rating of A and BBB represent the investment grade corporate bond.

This is an attractive investment for the more conservative investor.

This is an ideal investment choice for the 50-year old customer with very low tax bracket, in a state with high income tax rates. So she is seeking income and preservation of capital.

The best recommendation for the 5o-year-old customer would be 10- year maturity that is known as an investment-grade corporate bond.

Bonds rated "investment-grade" are considered to just have positive significant credit ratings and a low risk of default. Top companies may benefit from their status as investment-grade credits, resulting in lower interest rates.

A corporate or municipal bond with an investment-grade rating has a relatively low risk of default. Companies with a "AAA" rating are considered the least likely to default, according to Standard and Poors.

Businesses that Moody deems to be the least probable to happen start receiving an "Aaa" rank.

To know more about the various securities with maturity periods, refer to the link below:

https://brainly.com/question/25385948

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