Which of the Following Is Not True Regarding Certificates of Deposit

question 25

Multiple Choice

Which of the following is not true regarding certificates of deposit (CDs) ?

• A) The longer the term, the higher the interest rate paid.
• B) All banks offer the same rates on CDs.
• C) Early withdrawals of money are subject to a penalty.
• D) The investment of large amounts will pay higher interest than lower amounts.

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Definitions:

Percentage Depletion

A tax deduction method allowing businesses to account for the decrease of reserves in natural resources through a percentage of the revenue generated from those resources.

Cost Depletion

An accounting method used for allocating the cost of natural resources (like timber, oil, or minerals) over the period that they are extracted and sold.

Income Tax Allocation

The process of assigning income taxes to different departments, periods, or product lines in financial accounting.

Pretax Financial Income

The amount of income that a company has earned before any taxes have been deducted, as reported on the income statement.