Diane, a 22-year-old restaurant manager in Chicago, wants to prepare for her retirement by investing in bondssomething she considers to be a reliable long-term investment. Her goal is to retire by age 65 to live a lifestyle similar to her current lifestyle. Right now, she travels very little, enjoys several nights a week out with her friends, and spends most of her free time making jewelry to sell on the side. During retirement, Diane hopes to have a house, a working vehicle, and all the necessary things for a comfortable, but not extravagant, living.

Her investment requirements are straightforward. She doesn't need interest payments along the way, although she wouldn't refuse them. However, she does need her money to be repaid at maturityno sooner. And, she's not interested in trading bonds in the open market. She just wants something reliable for her money, so her funds will be available when it's time to retire.

• If you were Diane's financial advisor, which bonds would you recommend she buy?
• Would you recommend Diane buy marketable or non-marketable bonds? Why?
• Would you recommend she purchase corporate or government bonds? Why?
• Which specific (corporate or government) bonds would you recommend Diane pur- chase? Why?
• What else would you recommend that Diane do to meet her retirement goals?