Question

How do bonds generate income for investors?

Answer 1

The bond's investors earn interest payments while holding the bonds until they mature and generate money from them. hence option d.

What are bonds?

A bond is a sort of security used in finance where the issuer owes the holder debt and is required, depending on the terms, to repay the principal and interest on the bond at the maturity date. Interest is often paid at regular intervals.

Direct bond purchases are made by private investors with the intention of holding them till maturity and profiting from the income they accrue. Additionally, they could invest in a bond mutual fund or bond ETF (ETF).

Hence option D is correct regarding the generation of income from bonds.

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