When you invest in a CD that has a maturity of one year, you are guaranteed the interest rate offered on that CD. Your return would be
A) a risk premium.
B) money in the bank.
C) a risk-free return.
D) liquid assets.

Question

Quizplus · Accepted Answer

Investing in a Certificate of Deposit (CD) with a fixed interest rate for a specific term, such as one year, provides a guaranteed return on your investment, assuming the bank does not default. This is considered a risk-free return because the interest rate is fixed and guaranteed for the term of the CD.

When You Invest in a CD That Has a Maturity