31
QuizMultiple Choice

Topic Test

Question 31 • 26-27 Ignite Technical Math-Financial Math - MA2007

Which of the following are advantages of certificates of deposit (CDs) over savings accounts?I. CDs are more readily accessible than savings accounts.II. CDs offer greater interest rates than savings accounts.III. CDs have greater FDIC backing than savings accounts.

Answer
A
I and II
B
II only
C
I and III
D
none of these

Explanation

CDs often offer higher interest rates than savings accounts, so statement II is an advantage. But CDs generally restrict access to the money until the term ends, unlike savings accounts, so statement I is false. CDs and savings accounts are both insured by the FDIC under the same coverage limits, so statement III is false. Therefore, the correct choice is “II only.”

AI-written and checked against the verified answer.

Previous
Next