11.02 Notes Guide

_________ refers to how easily an asset can be turned into cash.

​ (a)   (CDs for short) are accounts that earn an interest rate proportional to the length of time your money is held. The longer the bank keeps your money, the ​ (b)   the interest rate will be. CDs are considered to be ​ (c)   investments.

• Certificates of deposit
• Money Market Accounts
• higher
• lower
• low risk
• high risk

One strategy for CD investing is _________ because you can find the best interest rates spread over months or years and still have some liquidity

The interest earned on ________________ is based on the interest banks make on short-term investments.

• money market accounts

• stocks

• bonds

These accounts differ from regular savings accounts because they typically earn higher interest but also have higher minimum balance requirements (sometimes $1,000 to $10,000). They also typically earn more interest than CDs do, depending on the performance of the account.

• Money market accounts

• Stocks

• Bonds

A __________ is the most convenient and least complex way to invest your money.

• Savings Account

• CD

• Checking Account

• Money market account

In a CD, the shorter the term is, the _____ the interest rate is.

• higher

• lower

If you have a large amount of cash, the best option for earning interest in a short amount of time is to use a _____.

• CD

• Money Market account

• Checking account

• Savings account

A _____ is a share in the ownership of a company.

The more stock you purchase, the greater your portion—or _____—in the company’s earnings.