What Type of Account Would You Expect to Provide the Poorest

question 56

Multiple Choice

What type of account would you expect to provide the poorest yield?

• A)Certificate of deposit earning 4% compounded semiannually
• B)Savings account earning 4% compounded annually
• C)Money market account earning 4% compounded monthly
• D)Money market fund earning 4% compounded monthly
• E)Savings account earning 4% compounded semiannually

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value due to use, wear and tear, or obsolescence.

Disposable Income

The net income available to an individual or household for saving or spending after income taxes have been deducted.

C + I

An abbreviation for "Consumption + Investment," which are components used in calculating gross domestic product (GDP) in the expenditure method.

Disposable Income

Money that households can allocate towards savings and spending after income tax charges.