11
QuizMultiple Choice

Banking: How to Manage Your Money — Quiz

Question 11 • Economics

In which situation would a certificate of deposit (CD) be the best banking choice?

Answer
A
Samuel is setting money aside but still needs emergency access to it.
B
Darren is looking for an investment that has a very high interest rate.
C
Raj is looking for an investment with a fast return so he can reinvest.
D
Hafsa wants a guaranteed return, and won’t need the money for several years.

Explanation

A certificate of deposit usually offers a guaranteed interest rate for a set term, but withdrawing the money early may result in a penalty. That makes it a good choice for Hafsa, who wants a guaranteed return and will not need the money for several years. Samuel would be better served by an account with easier access to emergency funds.

AI-written and checked against the verified answer.

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