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  CDs and Investing Basics   Chapter 2: Certificates of deposit
Get paid to let someone else use your money! Invest in CDs.
 
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Investing Basics: Chapter 2 quiz

If you think you've mastered the material in this chapter, take our quiz. After you click the ''submit'' button, the answers will appear below.

  1. Why invest in certificates of deposit, or CDs?
    a) CDs offer higher interest rates than a regular savings account in exchange for not touching your money for a predetermined amount of time.
    b) CDs offer a guaranteed, fixed-income portion to your portfolio of investments.
    Both a and b

  2. True or false? When interest rates are low, it's best to buy long-term CDs.
    True.
    False.

  3. Identify the type of CD that allows you to withdraw money without incurring a penalty as long as you maintain a minimum balance.
    Traditional CD.
    Bump-up CD.
    Liquid CD.
    Zero-coupon CD.

-- Posted: May 1, 2006
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 RESOURCES
Calculate your CD earnings
401(k) savings calculator
When it's OK to tap your IRA
 TOP INVESTING STORIES
Fame & Fortune: Monica Seles
10-year Treasury-buyer beware
9 cash-saving strategies that pay big bucks

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CDs and Investments
Compare today's rates
NATIONAL OVERNIGHT AVERAGES
1 yr CD 0.95%
2 yr CD 1.16%
5 yr CD 1.71%
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