Which of the following is true of a traditional certificate of deposit (CD)?

Question

Quizplus · Accepted Answer

Traditional CDs require the investor to keep the money invested at the issuing institution for a specified time period, typically ranging from three months to five years.

Answer: B 
 This statement is false. Traditional CDs pay periodic interest, usually at a fixed rate, which is a key feature that attracts investors.

Answer: C 
 This statement is false. Traditional CDs are repaid in full by the issuing bank at the end of the specified time period, along with any accrued interest.

Answer: D 
 This statement is false. Traditional CDs have a fixed rate of interest, meaning the rate remains the same for the entire term of the CD.

Answer: E 
 This statement is false. Traditional CDs are not traded on the market and do not have a market price. They are purchased directly from the issuing institution at a fixed price and redeemed at face value at maturity.

Which of the Following Is True of a Traditional Certificate