Why Do CDs Have Higher Interest Rates Than Savings Accounts

question 40

Multiple Choice

Why do CDs have higher interest rates than savings accounts?

• A)CDs are much riskier investments than savings accounts.
• B)Interest on CDs is taxable while interest on savings accounts is not.
• C)CDs provide better hedges against inflation than do savings accounts.
• D)CDs are not as liquid as savings accounts.

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Definitions:

Blaming Oneself

The act of holding oneself responsible for certain outcomes or situations, often associated with feelings of guilt or inadequacy.

Situational Causes

Factors in the environment or external circumstances that are believed to cause or influence individuals' behavior and actions.

Depression

An ongoing mental state of depression or a decline in interest in activities, causing significant disruptions in day-to-day living.

Aversion Therapy

A form of psychological treatment where the patient is exposed to a stimulus while simultaneously being subjected to some form of discomfort, aimed at reducing unwanted or harmful behaviors.