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 termed
A)risk premium.
B)money in the bank.
C)risk-free return.
D)liquid assets.

Question

Quizplus · Accepted Answer

When you invest in a CD with a maturity of one year, you are guaranteed a fixed interest rate, which means you have a risk-free return. This is because there is no chance of losing your principal investment and the interest earned is predetermined. Therefore, the best choice is option C, risk-free return. Options A, B, and D are not relevant in this context.

When You Invest in a CD That Has a Maturity