In the context of financial securities, identify a true statement about certificates of deposit.
A) Certificates of deposit with longer maturities typically earn a lower interest rate than certificates of deposit that have shorter terms.
B) They can be cashed in before they mature without incurring any penalty.
C) They offer higher returns than most other types of investments.
D) The rate of interest paid on certificates of deposit is usually lower than the interest rate on corporate bonds and most government securities.

Question

Quizplus · Accepted Answer

Certificates of deposit (CDs) typically offer lower interest rates compared to corporate bonds and many government securities because they are considered low-risk investments.

In the Context of Financial Securities, Identify a True Statement