An investor interested in receiving monthly income should purchase what type of security?

The choice of mortgage-backed securities is particularly suitable for an investor seeking monthly income because these financial instruments are designed to generate cash flows in the form of regular interest payments. Mortgage-backed securities consist of a pool of mortgage loans, and the borrowers make their monthly mortgage payments, which are then passed through to the investors who own the securities. This arrangement typically results in monthly income that aligns with the investor's goal.

In contrast, while bonds can also provide periodic interest payments, they usually follow a semiannual payment schedule rather than monthly. Common stock does not guarantee any regular income, as dividends are paid at the discretion of the company's board and are not guaranteed or fixed. Real estate investment trusts (REITs) may offer dividends, but those dividends can also vary and may not be distributed on a monthly basis. Thus, mortgage-backed securities stand out as the most fitting option for consistent monthly income.