Karen Wanted a Certificate of Deposit That Would Definitely Be

question 80

Multiple Choice

Karen wanted a certificate of deposit that would definitely be available until the maturity date.She would NOT want to consider a

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

---

Definitions:

Time Value of Money

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

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

Present Value Factor

A factor used to calculate the present value of a future amount of money or stream of cash flows given a specific rate of return.

Straight-Line Depreciation

A process of dividing the expense of a substantial asset into identical annual portions over its useful duration.