8
QuizMultiple Choice

Saving and Investing

Question 8 • EA Academy Civics 9

What makes CDs and money market accounts low-risk investments?

Answer
A
They have a high interest rate.
B
They are insured by the government.
C
They carry the promise of high profits.
D
They are loans to the federal government.

Explanation

CDs and money market deposit accounts at eligible banks are generally insured by the federal government, up to applicable limits, which protects depositors if the bank fails. That protection is what makes them low-risk; a high interest rate or promise of high profits does not reduce investment risk. Loans to the federal government describe Treasury securities, not CDs or bank money market accounts.

AI-written and checked against the verified answer.

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