Question

A negotiable certificate of deposit A. is a bearer instrument, meaning whoever holds the certificate at maturity receives the principal and interest. B. can be bought and sold until maturity. C. is a term security because it has a specified maturity date. D. all of the above.

Answer 1

Answer: Option D                                                  

Explanation:  A Negotiable Deposit Certificate  refers to a $100,000 initial face value deposit contract. These are lent by a bank and therefore can typically be offered on a highly liquid resale market,although before completion of maturity period they can not be cashed in.

An NCD is brief-term, varying from two weeks and a year. Cost will be charged at completion or the unit will be bought at a discount over its face value. Rates of interest are trad-able, and an NCD's yielding depends on the circumstances of the stock market.

Thus, from the above we can conclude that the correct option is D.