how do bonds generate income for investors? bonds depreciate in value. bonds protect investors from…

how do bonds generate income for investors? bonds depreciate in value. bonds protect investors from bankruptcy. bonds pay interest to the bank that sold the bond. bonds pay a specified amount to the investor at maturity.

how do bonds generate income for investors? bonds depreciate in value. bonds protect investors from bankruptcy. bonds pay interest to the bank that sold the bond. bonds pay a specified amount to the investor at maturity.

Answer

Brief Explanations:

Bonds are debt - securities. Investors earn income from bonds through periodic interest payments and a lump - sum payment at maturity. The first option is incorrect as depreciation is not an income - generating aspect. The second option is about protection, not income. The third option is wrong as interest is paid to the bondholder (investor), not the selling bank. The fourth option correctly states that bonds pay a specified amount (principal plus sometimes a final interest component) at maturity, which is an income source for investors.

Answer:

Bonds pay a specified amount to the investor at maturity.