Question

A customer, age 69, has never invested in securities. She is retired with no dependents, living on a fixed pension of $35,000 per year. She has a savings account with $160,000 and her home is fully paid. She desires to supplement her retirement income, assuming minimal risk. The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n):

A.variable annuity contractB.CMO planned amortization class trancheC.SPDRD.income (adjustment) bond

Answer 1

The answer is: B) CMO planned amortization class tranche

Step-by-step explanation:

A CMO (collateralized mortgage obligations) PAC (planned amortization class) Tranche is the safest way the lady can invest considering her age and financial needs. A PAC is an asset backed security that is an extremely safe investment that guarantees regular payments (in tranches). The downside is that it offers a very low yield. The safer the investment, the lower the yield.