with a bank for a set period of time to earn a higher rate of interest.She does not plan to make an early withdrawal,because early withdrawals are subject to penalties.The best investment in her case is a:

Question

Quizplus · Accepted Answer

A certificate of deposit (CD) is the best investment choice in this case because it offers a higher rate of interest compared to a passbook savings account, and it requires the account holder to keep the money invested for a set period of time without any early withdrawals. The penalty for early withdrawals acts as a deterrent for the account holder to take out the money before its maturity date, which ensures that the money stays invested and earns a higher rate of interest for the entire duration of the CD. A foreign currency deposit and commercial draft are not appropriate investment choices for this scenario.

With a Bank for a Set Period of Time to Earn