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Questions and Answers
What is the primary risk associated with certificates of deposit (CDs)?
What is the primary risk associated with certificates of deposit (CDs)?
- Inflation risk
- Fluctuating interest rates
- Early withdrawal penalties (correct)
- Credit risk
What is the primary characteristic of an asset class?
What is the primary characteristic of an asset class?
- Similar laws and regulations (correct)
- Similar profit potential
- Similar market prices
- Similar investor profiles
What is the primary advantage of a cash bank deposit?
What is the primary advantage of a cash bank deposit?
- High returns on investment
- Easy liquidity
- Precise knowledge of interest earned (correct)
- High risk, high reward
What is the primary role of the borrower in a bond transaction?
What is the primary role of the borrower in a bond transaction?
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Why do cash investments often fail to beat inflation?
Why do cash investments often fail to beat inflation?
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What is the primary purpose of an investment risk ladder?
What is the primary purpose of an investment risk ladder?
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What is the primary factor that determines bond rates in organizations?
What is the primary factor that determines bond rates in organizations?
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What is the minimum investment required to invest in a mutual fund?
What is the minimum investment required to invest in a mutual fund?
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How are mutual funds valued?
How are mutual funds valued?
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What is a characteristic of exchange-traded funds (ETFs)?
What is a characteristic of exchange-traded funds (ETFs)?
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What is the primary benefit of investing in mutual funds?
What is the primary benefit of investing in mutual funds?
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What is the claim of shareholders on a company's assets in the event of liquidation?
What is the claim of shareholders on a company's assets in the event of liquidation?
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