Asked by
Salma Seyyid
on Nov 27, 2024
Verified
A certificate of deposit (CD) is issued when Lo-Risk Invest LLC deposits funds with Money Bank on the bank's promise to repay the funds, with interest, on a certain date. Lo-Risk cannot withdraw the funds before the date of maturity because
A) the bank is both the issuer of the instrument and the drawee.
B) a CD is a time deposit.
C) a CD cannot be sold or negotiated to a third party before maturity.
D) a CD is not a three-party instrument.
Certificate Of Deposit
A savings certificate entitling the bearer to receive interest after a fixed term deposit matures, with a fixed or variable interest rate.
Time Deposit
A deposit in a bank account that cannot be withdrawn for a preset period of time without incurring a penalty.
Maturity
The date on which a financial obligation must be repaid or the final payment is due.
- Discern the differences among negotiable instruments and how they are used in various transactional contexts.
Verified Answer
AH
Learning Objectives
- Discern the differences among negotiable instruments and how they are used in various transactional contexts.