What Is Earning Interest on Interest

question 17

Multiple Choice

What is earning interest on interest?

• A)Compounding
• B)APR (annual percentage rate)
• C)Savings
• D)Investing

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Definitions:

Clearing Platform

Infrastructure provided by a clearing house that facilitates the settlement of trades by acting as an intermediary between buyers and sellers.

CME

Stands for Chicago Mercantile Exchange, a major global financial derivatives exchange where various commodities, financial products, and currencies are traded.

S&P 500 Index Futures

Financial contracts that speculate on the future value of the S&P 500 index, allowing investors to bet on the stock market's direction without holding the underlying stocks.

Futures Price

The agreed-upon price for the future purchase or sale of an asset in a futures contract.