What Is the Major Difference Between a CD and a Deposit

question 315

Multiple Choice

What is the major difference between a CD and a deposit?

• A) The CD yields a higher rate of return
• B) The CD has less credit risk
• C) The CD is a transferable instrument
• D) The CD has a shorter range of maturities

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Definitions:

Interest-Bearing Note

A debt instrument in which the issuer pays the holder interest at a specified rate over the term of the note.

Accrued Interest

Interest that has been incurred but not yet paid or received in cash.

Adjusting Entry

An accounting record made to adjust income or expenditure in accounts to reflect the accrual basis of accounting properly.