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1 FINANCE MCQS

A negotiable certificate of deposit (with one-year maturity) pays interest __________?

  • Every two weeks
  • Semiannually
  • Monthly
  • Annually
Correct Answer: D. Annually

Detailed Explanation

A negotiable certificate of deposit (CD) is a fixed-term deposit instrument issued by banks. When the CD has a one-year maturity, it typically pays interest annually, at the end of the term. Unlike savings accounts, these CDs do not pay periodic interest; instead, the interest is paid in a lump sum upon maturity.

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