Certificates of deposit exist as funds that the bank keeps on hand that exists not loaned out or invested in bonds.
<h3>What are certificates of deposits?</h3>
Unsecured negotiable promissory notes, or certificates of deposit (CDs), are frequently issued by commercial banks and other financial organizations.
A certificate of deposit (CD) is a type of savings account where the issuing bank pays interest in exchange for holding a specified sum of money for a predetermined length of time, such as six months, a year, or five years. You will receive the amount you initially invested plus any interest when you cash in or redeem your CD.
Bonds and certificates of deposit (CDs) are comparable but not the same. Both of these securities are fixed-income investments that the holder keeps until the due dates. Investors invest money in bonds or CDs for a predetermined amount of time, and when that time expires, they receive their money back.
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Answer:
The correct answer is straight rebuy.
Explanation:
The straight buyback is a routine, low participation purchase. A minimum of information is needed and consideration of alternatives is not necessary. This type of purchase is handled by the purchasing department and is usually acquired from a list of approved suppliers. Examples of straight repurchase are repeating purchases of office supplies, and small parts.
Answer: d. earn a higher return on its investments than the interest rate it pays to acquire funds.
Explanation:
When firms borrow money they usually do it with one thing in mind, that is to maximise or to make more profit. They believe that with the borrowed money they can improve the operations of the business and therefore make higher returns.
Seeing as they would have to pay the bank or financial institution they lent the money from a certain amount of interest, it would be within their best interests to make enough money from their investments to pay off the leverage. Not only also, do they have to make enough to pay off the loan but they have to make higher than that so that they can actually make a profit after paying off the interest on the leverage.
This is why their investments must give a higher rate return than the interests rate they pay for the leverage.
Answer:
c. lower unemployment and higher inflation.
Explanation:
Since Country A's LRPC lies to the left of Country B's LRPC, it implies that its natural rate of unemployment is less than that of Country B's. Also Country A's money supply growth rate is higher. This suggests that Country A will have a higher inflation and a lower unemployment rate. Attach below is the graph illustration.
Answer:
Repurchase agreement.
Explanation:
Repurchase agreement is also known as repo. It is short-term borrowing mostly in government securities. The dealer's buy securities and sell them only to repurchase them soon at a higher price.
The securities are used as collateral for borrowing.
