One of the characteristics of a certificate of deposit is that it can have ______. a. high interest-rate risk. b. low safety for savers. c. limited liquidity. d. a variable rate of return. e. no minimum deposit amount.

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28.07.2022 - 09:34

One of the characteristics of a certificate of deposit is that it can have ______. a. high interest-rate risk. b. low safety for savers. c. limited liquidity. d. a variable rate of return. e. no minimum deposit amount.

Question:

One of the characteristics of a certificate of deposit is that it can have _____.

a. high interest-rate risk.

b. low safety for savers.

c. limited liquidity.

d. a variable rate of return.

e. no minimum deposit amount.

Answers (1)

Elizabeth April 5, 2023 в 10:02

The correct answer is (c) limited liquidity. This means that once you invest your money in a certificate of deposit, you cannot withdraw it until the maturity date without incurring a penalty. This lack of liquidity makes it less flexible than other savings accounts or investments. However, in exchange for this limitation, CD accounts usually offer higher interest rates than regular savings accounts, making it a good option for those who can afford to keep their funds locked up for a certain period of time.

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