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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?
Why do cash investments often fail to beat inflation?
Why do cash investments often fail to beat inflation?
What is the primary purpose of an investment risk ladder?
What is the primary purpose of an investment risk ladder?
What is the primary factor that determines bond rates in organizations?
What is the primary factor that determines bond rates in organizations?
What is the minimum investment required to invest in a mutual fund?
What is the minimum investment required to invest in a mutual fund?
How are mutual funds valued?
How are mutual funds valued?
What is a characteristic of exchange-traded funds (ETFs)?
What is a characteristic of exchange-traded funds (ETFs)?
What is the primary benefit of investing in mutual funds?
What is the primary benefit of investing in mutual funds?
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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