You have retired a long and successful career as a business executive and now sp

Question

You have retired a long and successful career as a business executive and now spend a good portion of your time managing your retirement portfolio. You are considering three basic investment alternatives. You can invest in (1) corporate bonds paying 7 percent interest, (2) conservative stocks that pay substantial dividends (typically 5 percent of the stock price every year), and (3) growth-oriented technology stocks that pay no dividends.

Required:
Analyze each of these alternatives and select one. Justify your selection.

Explanation / Answer

This is very critical to say it’s completely depend on the individual preferences of a stock holders for example some require huge returns and they not bother about risk factor in it and some require safety and marginal returns this are very concern about risk.

As per my view it is corporate bond is preferable because of huge returns but at the same time risk involve but as a trader it is mandatory to face risk

Learn something About corporate bonds to have a clear idea .

A debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company's physical assets may be used as collateral for bonds

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