Income Beginner: Introduction to Certificates of Deposit (CDs)

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What is the denomination range for small-savings certificates of deposit?

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$0$10,000

$500$10,000

$1,000$100,000

Less than $100,000

Less than $100,000. Small-savings CDs may not exceed $100,000.

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

False

True. Length of time is one factor among many that determine interest or dividend rates.

If you want to increase the deposit on your CD periodically, you can do so by buying _________.

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A stock-index CD

An add-on CD

A discount CD

An add-on CD. With an add-on CD, you can add funds throughout the life of the CD.

To be quoted on the NASDAQ, a negotiable certificate of deposit must have a maturity of at least _______.

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30 days

14 days

2 days

6 months

14 days. This is the minimum maturity.

A certificate of deposit of ________ is called a small-savings CD.

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$100,000 or more

Any amount

Less than $100,000

Less than $100,000. Small-savings CDs exist only in amounts less than $100,000.

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