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Certificates of Deposit Purchased in Small Denominations of $1,000 at Commercial

question 10

True/False

Certificates of deposit purchased in small denominations of $1,000 at commercial banks or savings and loan organizations are readily marketable.


Definitions:

Desired Rate of Return

The minimum percentage of gain or profit expected by an investor from an investment.

Compound Interest

Interest earning mechanism in which the calculation includes interest on the original principal and on all previously earned interest of a loan or deposit.

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Earnings Rate

The return on an investment or project expressed as a percentage of the cost, often used to measure profitability.

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