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Karo-lina-s [1.5K]
2 years ago
8

An agent sells his client 10 U.S. government bonds due to mature in 30 years. According to NASAA's Statement of Policy on Unethi

cal or Dishonest Business Practices of Broker-Dealers and Agents. What statements may the agent legally make?
Business
1 answer:
Artemon [7]2 years ago
4 0

Answer:

The bonds are guaranteed as to principal and interest payments by the US government.

Explanation:

According to NASAA's Statement of Policy on Unethical or Dishonest Business Practices of Broker-Dealers and Agents, a broker can say US government bonds are guaranteed on principal and interest payments.

However if inflation sets in and interest rates rises there is no guarantee from the government that interest paid on the bonds will match the higher interest rate.

So legally this statement is correct, even though the investor can lose money as a result of higher interest rate in the future.

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