One type of investment that have a variable income is
Answer Details
The type of investment that has a variable income is ordinary shares, also known as common stocks. Ordinary shares represent ownership in a company, and their value is directly tied to the performance of the company. The income generated from ordinary shares comes in the form of dividends, which are payments made by the company to its shareholders.
The amount of dividends paid to shareholders can vary from year to year, depending on the financial performance of the company. If the company is profitable, it may choose to pay higher dividends to shareholders. Conversely, if the company is not doing well, it may choose to reduce or eliminate dividend payments.
Unlike other types of investments, such as government bonds and preferred shares, which typically offer a fixed rate of return, the income generated from ordinary shares is not guaranteed and can vary significantly from year to year.
Therefore, if an investor is looking for an investment with the potential for higher returns but is willing to accept the risk of variable income, ordinary shares may be a suitable option.