Certificate of Deposits (CDs) ________

question 19

Multiple Choice

Certificate of deposits (CDs) ________.

• A) are financial assets issued by banks or thrifts that indicate a specified sum of money has been deposited at an issuing depository institution.
• B) are issued by banks but not thrifts to raise funds for financing their business activities.
• C) bear a maturity date and a specified interest rate, but cannot be issued in any denomination.
• D) are issued by banks that are not insured by the Federal Deposit Insurance Corporation.

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Definitions:

Annual Interest Rate

The percentage of the principal that is paid as interest to the lender over the course of a year.

Consumer Price Inflation

The pace at which the average cost of goods and services elevates, resulting in diminished purchasing capacity.

CPI

The CPI, or Consumer Price Index, tracks the average variation in prices that urban customers pay for a selection of consumer goods and services over a period of time.

Consumer Price Index

A metric assessing the weighted mean of costs for a variety of consumer items and services, including food, transportation, and healthcare.