Income Beginner: Introduction to Certificates of Deposit (CDs)

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1.
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.
2.
The length of time for which a certificate of deposit stays in the financial institution contributes to the size of its interest or dividend rate.
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True. Length of time is one factor among many that determine interest or dividend rates.
3.
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.
4.
If you want to increase the deposit on your CD periodically, you can do so by buying _________.
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An add-on CD. With an add-on CD, you can add funds throughout the life of the CD.
5.
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.