Fixed income is defined as which of the following?

Fixed income is defined as which of the following?

• A. Amounts of money you receive regularly
• B. Amounts of money you receive irregularly
• C. Lump-sum windfalls
• D. Income from a business

Answer: (A)

Fixed income is about a stream of cash payments that you receive on a regular basis. This regular, contractual income is what defines fixed-income investments—think of bonds that pay set coupon amounts at fixed intervals and return the principal at maturity. That’s why describing fixed income as amounts of money you receive regularly is the best fit. The other options describe irregular payments, lump-sum windfalls, or income from a business, none of which capture the predictable, ongoing nature of fixed-income cash flows.

Fixed income is about a stream of cash payments that you receive on a regular basis. This regular, contractual income is what defines fixed-income investments—think of bonds that pay set coupon amounts at fixed intervals and return the principal at maturity. That’s why describing fixed income as amounts of money you receive regularly is the best fit. The other options describe irregular payments, lump-sum windfalls, or income from a business, none of which capture the predictable, ongoing nature of fixed-income cash flows.