Nazim wants to include putable bonds in his investment portfolio. Nazim is likely to put the bonds when: a. He has reinvestment options with higher yields b. He has reinvestment options with lower yields Nazim also recently bought bonds with a clause stating that interest will be paid based on the inflation rate. When the inflation rate increases, the interest on the bonds will also increase. Nazim has invested in

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Business

Maverick Benjamin

4 December, 08:00

Nazim wants to include putable bonds in his investment portfolio. Nazim is likely to put the bonds when: a. He has reinvestment options with higher yields b. He has reinvestment options with lower yields Nazim also recently bought bonds with a clause stating that interest will be paid based on the inflation rate. When the inflation rate increases, the interest on the bonds will also increase. Nazim has invested in

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Answers (2)

Know the Answer?

Micah · Answer 1

1). Answer : - Option b). He has reinvestment options with higher yields.

2). Answer : - Nazim has invested in purchasing power bonds / Indexed bonds.

Rubi Berg · Answer 2

He has reinvestment options with higher yields

Income bonds

Explanation:

Nazim is likely to put the bonds when he is in need of money and as such will go for a reinvestment option having a higher yield. Also, if Nazim recently bought bonds with a clause stating that interest will be paid based on the inflation rate, then Nazim has invested in income bonds, because income bond interest rate is dependent on inflation rate; as inflation rate increases, interest on the bond also increases.