2
QuizMultiple Choice

Fixed Investments — Quiz

Question 2 • Financial Math

Which scenario is a fixed investment?

Answer
A
a certificate of deposit (CD) with a fixed interest rate for a term of 3 years, with the principal repaid at maturity
B
a savings account with a variable interest rate and no fixed term
C
an index fund that tracks a market index and has returns varying with market performance
D
a stock investment with dividends that fluctuate based on the company's annual profits

Explanation

A fixed investment has terms set in advance, such as a stated interest rate and a defined period. The 3-year CD pays a fixed interest rate and returns its principal at maturity, so it fits. The stock and index fund depend on changing market or company performance, while the savings account’s interest rate can vary.

AI-written and checked against the verified answer.

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