Question 7 • CARE_24_25_TX-Mathematical Models with Applications A
Why do certificates of deposit tend to offer better interest rates than money market accounts?
Answer
A
Certificates of deposit involve a longer time commitment than money market accounts, so they carry a greater return.
B
Certificates of deposit are only available to the bank’s most proven and valuable customers, so the bank can afford to give a greater interest rate on them.
C
They do not offer a better interest rate. Money market accounts tend to have the best interest rates of any bank deposit.
D
Money market accounts invest your money but sometimes lose some of it, so the lower interest rate pays for the difference.