A Certificate of Deposit That Has Different Interest Levels Based

question 96

Multiple Choice

A certificate of deposit that has different interest levels based on the stock market performance is called a

• A) Bump-up CD.
• B) Callable CD.
• C) Portfolio CD.
• D) Promotional CD.
• E) Stock-indexed CD.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Probability-Weighted

An approach to forecast future outcomes which involves assigning probabilities to different possible events and calculating expected values.

Time Value

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate. It is the value at which a company's shares are initially recorded in its books.