Which does not characterize a certificate of deposit (CD)?
A)A CD is sold at a discount.
B)A CD is sold by a depository institution.
C)A CD pays annual interest payments equal to a fixed percent of the original purchase price.
D)At maturity, the original purchase price is returned.

Question

Quizplus · Accepted Answer

A certificate of deposit (CD) is not sold at a discount. It is sold at its face value, which is the original purchase price. The other options (B, C, and D) all characterize a typical CD. A CD is sold by a depository institution, pays annual interest payments equal to a fixed percent of the original purchase price, and at maturity, the original purchase price is returned.

Which Does Not Characterize a Certificate of Deposit (CD)