If a University Student Invests in a 90- Day Certificate

question 58

True/False

If a university student invests in a 90- day certificate of deposit (CD) at 6.5% per annum, then market yields on CDs rise to 7.0% and the student tries to sell the CD, she will suffer a capital loss.

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Definitions:

Proxies

Agents authorized to act on behalf of others, particularly in voting at shareholder meetings.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry and enforcing federal securities laws.

Fraud in Securities Transactions

Illegal activities involving deceit or concealment in the buying, selling, or trading of securities, aimed at gaining a financial advantage.

SEC Regulations

Rules and standards developed and enforced by the U.S. Securities and Exchange Commission to regulate the securities industry.