Income Beginner: Introduction to Certificates of Deposit (CDs)

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1.
You can buy negotiable certificates of deposit in any amount.
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False. You can buy them only in amounts over $100,000.
2.
If you buy a $1,000 CD for only $600, what type of CD is it?
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Discount CD. To be discounted is to be sold for less than face value.
3.
A certificate of deposit of ________ is called a small-savings CD.
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Less than $100,000. Small-savings CDs exist only in amounts less than $100,000.
4.
To be quoted on the NASDAQ, a negotiable certificate of deposit must have a maturity of at least _______.
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14 days. This is the minimum maturity.
5.
Compounding makes a yield _______ simple interest/dividends.
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Higher than. Compounding gives you additional earnings on top of the earnings youve already received.