Which of the following is a certificate of deposit (CD)?(1 point) Responses An account paying 0.5% interest with no other limitations. An account paying 0.5% interest with no other limitations. A deposit that has to be maintained in the bank for 1 year in exchange of a 2% interest. A deposit that has to be maintained in the bank for 1 year in exchange of a 2% interest. A “basket” of money pooled in by many investors to acquire securities based on the value of cash. A “basket” of money pooled in by many investors to acquire securities based on the value of cash. An investment in stocks.
A deposit that has to be maintained in the bank for 1 year in exchange of a 2% interest.
The correct answer is:
- A deposit that has to be maintained in the bank for 1 year in exchange for a 2% interest.
This option describes a certificate of deposit (CD), which is a type of time deposit offered by banks. It requires the depositor to keep the funds in the bank for a specific period of time (in this case, 1 year) in exchange for a fixed interest rate (in this case, 2%). CD accounts typically offer higher interest rates than regular savings accounts, but there are penalties for withdrawing the funds before the maturity date.
The correct answer is: "A deposit that has to be maintained in the bank for 1 year in exchange for a 2% interest."
To identify which option is a certificate of deposit (CD), we need to understand what a CD is. A certificate of deposit is a financial product offered by banks and credit unions. It is a time deposit where you agree to keep your money in the account for a specific period (in this case, 1 year) in exchange for a fixed interest rate (in this case, 2%).
Looking at the options, the only one that matches the criteria of a CD is the one that mentions a deposit that has to be maintained in the bank for 1 year in exchange for a 2% interest. The other options are either general bank accounts or investment options like a pooled investment fund or stocks.