Question : Which of the following is a feature of a certificate of deposit (CD)?
Option 1: High liquidity
Option 2: Low interest rate
Option 3: Fixed maturity period
Option 4: No credit risk
Answer (1)
19th Jan, 2024
Correct Answer: Fixed maturity period
Solution : The correct answer is (c). Fixed maturity period
A CD has a predetermined maturity date, which is the duration for which the funds are locked in. The maturity period can range from a few months to several years, depending on the terms of the CD. During this period, the funds cannot be withdrawn without incurring penalties.
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