Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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Study for the FBLA Securities and Investments Test. Enhance your financial expertise with well-crafted questions, hints, and detailed explanations. Get exam-ready today!

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What is the investment objective focused on current income through fixed income securities called?

Capital appreciation
Growth
Income
Speculation

The correct answer is: Income

The investment objective focused on current income through fixed income securities is known as "income." This strategy is geared towards generating a steady stream of income, often through investments like bonds or dividend-paying stocks. Investors who select this approach typically prioritize receiving regular cash flows over increasing the value of their initial investment. Income-focused investments provide a predictable return that can be especially appealing to those in or nearing retirement who require consistent cash flow to meet living expenses. This objective contrasts with capital appreciation, which aims for an increase in the value of investments over time, and growth, which emphasizes investing in assets expected to increase in value. Additionally, speculation involves taking significant risk in hopes of achieving high returns, usually through short-term investments or trading strategies, which is quite different from the income-focused approach that seeks stability and predictability.