Which of the Following Is Not an Advantage of a CD

question 35

Multiple Choice

Which of the following is not an advantage of a CD as a cash management alternative?

• A)CDs have fixed interest rates,which are beneficial if interest rates drop.
• B)CDs offer a wide selection of maturities.
• C)CDs are insured.
• D)CDs offer liquidity.
• E)CDs are convenient to purchase.

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Definitions:

Exit Value

The estimated amount that an asset or investment could be sold for at the end of its useful life.

Economic Resource

Assets or inputs that have the potential to contribute to the production of goods and services, providing economic benefit to businesses or individuals.

Asset

Resources owned or controlled by a business, projected to bring future economic benefits.

Measurement Alternative

An accounting option that allows entities to measure certain investments at cost, minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.