Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

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Question: 1 / 875

Which of the following is an example of a long-term fixed income security?

Commercial Paper

Treasury Bills

Bonds

Bonds are considered long-term fixed income securities because they typically have maturities that exceed one year, often ranging from several years to several decades. When an investor purchases a bond, they are essentially lending money to the issuer (which could be a government or corporation) in exchange for periodic interest payments and the return of the principal amount at maturity. This characteristic not only provides a steady income stream through interest payments but also entails a commitment over a longer period, distinguishing them from other options that are considered short-term or variable in nature.

In contrast, commercial paper and treasury bills are short-term financial instruments, with maturities usually less than one year. Bankers' acceptances also fall into a short-term category as they are generally issued for a few months. Therefore, bonds stand out in this context as the only option that consistently represents long-term fixed income security.

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Bankers Acceptances

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