Question : Assertion: Certificate of Deposit (CD) is an instrument issued by commercial banks.
Reason: CD is a negotiable instrument that represents a time deposit with a bank.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer:
Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
The assertion is true. A Certificate of Deposit (CD) is indeed an instrument issued by commercial banks.
The reason is also true and provides the correct explanation. A CD is a negotiable instrument representing a time deposit with a bank, usually for a fixed term. The holder of a CD receives interest upon maturity, and it's a common investment tool offered by commercial banks. Therefore, the reason is the correct explanation for the assertion.
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