Floating Rate CDs Differ from Regular CDs in That

question 23

Multiple Choice

Floating rate CDs differ from regular CDs in that:

• A)they have longer maturity.
• B)they differ substantially in default risk.
• C)they are not taxed.
• D)they have coupons that are frequently reset.
• E)All of the above describe differences.

---

Definitions:

Depreciation Rates

Percentages or methods used to systematically reduce the book value of a tangible asset over its useful life.

Double-Declining-Balance

An accelerated depreciation method that doubles the straight-line depreciation rate, reducing the asset's book value more quickly.

Straight-Line

A method of calculating depreciation of an asset, which allocates an equal amount of depreciation each year over the asset's useful life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.