What are "fixed income securities"?

Fixed income securities are debt instruments that provide fixed periodic payments, making them a key component of the bond market. These securities, such as government and corporate bonds, typically pay interest at regular intervals, often semi-annually, and return the principal amount at maturity. This characteristic of offering predictable cash flows attracts investors who seek stability and income, particularly in volatile markets.

The other options describe different investment categories. Equity investments, which are mentioned in the first choice, are associated with ownership in a company and do not guarantee fixed returns, as their value is subject to market fluctuations. The third choice refers to assets that appreciate in value, which is often a characteristic of equities or real estate rather than fixed income securities. Lastly, the fourth option highlights investment vehicles with no guaranteed returns, which contrasts with the nature of fixed income securities where payments are typically predetermined and contractual. Understanding the fundamental characteristics of fixed income securities is essential for investors seeking to balance risk and income within their portfolios.