Casey has $ 1,000 to invest in a certificate of deposit. Her local bank offers her 2.5% on a 12- month FDIC- insured CD. A nonfinancial institution offers her 5.2% on a 12- month CD. What is the risk premium? What else must Casey consider in choosing between the two CDs?
Answer to relevant QuestionsMike, a recent college graduate, opened a checking account with a local bank. He asked numerous questions before deciding on this bank, including inquiring about checking account fees and annual credit card fees. When Mike ...What types of securities do they invest in? What is commercial paper? Are MMFs risky investments? Are MMFs liquid? What is a disadvantage of maintaining a very high level of liquidity? How does a money market deposit account (MMDA) differ from a NOW account? When might a depositor use an MMDA? He can purchase a $ 20,000 T- bill for $ 19,400 or two $ 10,000 T- bills for $ 9,600 each. Which will give him the better return?
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