Problemas
A one-year CD has a __ return and __ liquidity than a checking account. a lower; lower b higher; higher C higher; lower d lower; higher
Roztwór
Rosa María
professionell · Tutor durante 6 años
4.6
(162 Votos)
Respuesta
The correct answer is 'C'. A one-year CD has a higher return and lower liquidity than a checking account.
Explicación
## Step 1A Certificate of Deposit (CD) is a type of financial product that is commonly offered by banks, thrift institutions, and credit unions. It is a type of savings account that has a fixed term (often monthly, three months, six months, or two years), and a fixed interest rate. It is intended that the CD be held until maturity, at which point the money may be withdrawn together with the accrued interest.## Step 2CDs are different from checking accounts in several ways. One of the main differences is the interest rate. CDs typically have a higher interest rate than checking accounts. This is because the money in a CD is locked in for a certain period of time, which allows the bank to use that money for other investments.## Step 3Another difference is the liquidity. Checking accounts are highly liquid, meaning you can access your money at any time. CDs, on the other hand, have lower liquidity. This is because you are not allowed to withdraw your money before the end of the term without paying a penalty.