Marcus Bought a Certificate of Deposit Whose Interest Rate Is

question 22

Multiple Choice

Marcus bought a certificate of deposit whose interest rate is based on the stock market. Sometimes, his earnings are higher than other similar cds, and at other times, his earnings are lower. He purchased a

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

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Definitions:

Special Dividend

A one-time payment made by a company to its shareholders, usually in the form of cash, stocks or property, outside the regular dividend payments.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account the asset's risk.

Dividend Growth

The rate at which a company's dividend payments to shareholders increase over time, indicating the company's growth and stability.

Annual Dividend

A yearly payment made by a corporation to its shareholders, usually derived from the company's profits.