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Consider the following statements regarding the certificate of deposit.
1. It is used by banks and issued to the depositors for a specified period ranging less than one year.
2. They are negotiable and tradable in the money market.
3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.
Which of these statements are correct?
- a)1 and 2 Only
- b)2 and 3 Only
- c)1 and 3 Only
- d)All of them
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding the certificate of deposi...
Certificate of Deposit
Certificate of Deposit (CD) is a financial instrument used by banks and issued to depositors for a specified period of time. It is a type of time deposit where the depositor agrees to keep the money deposited for a fixed period of time in return for a fixed rate of interest. CDs are a safe investment option as they are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
Statements and Their Accuracy
1. It is used by banks and issued to the depositors for a specified period ranging less than one year.
This statement is correct. CDs are typically issued for a period ranging from a few months to a few years. The depositor agrees to keep the money deposited for the specified period of time in return for a fixed rate of interest. Early withdrawal of the money may result in penalties.
2. They are negotiable and tradable in the money market.
This statement is also correct. CDs are negotiable and can be traded in the secondary market. This means that the holder of a CD can sell it to another investor before the maturity date. The secondary market for CDs is known as the money market.
3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.
This statement is incorrect. Financial institutions are allowed to issue CDs for maturity periods ranging from a few months to several years. The maturity period of a CD depends on the terms and conditions set by the issuing bank.
Therefore, the correct statements are 1 and 2 only.
Certificate of Deposit (CD) is a financial instrument used by banks and issued to depositors for a specified period of time. It is a type of time deposit where the depositor agrees to keep the money deposited for a fixed period of time in return for a fixed rate of interest. CDs are a safe investment option as they are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
Statements and Their Accuracy
1. It is used by banks and issued to the depositors for a specified period ranging less than one year.
This statement is correct. CDs are typically issued for a period ranging from a few months to a few years. The depositor agrees to keep the money deposited for the specified period of time in return for a fixed rate of interest. Early withdrawal of the money may result in penalties.
2. They are negotiable and tradable in the money market.
This statement is also correct. CDs are negotiable and can be traded in the secondary market. This means that the holder of a CD can sell it to another investor before the maturity date. The secondary market for CDs is known as the money market.
3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.
This statement is incorrect. Financial institutions are allowed to issue CDs for maturity periods ranging from a few months to several years. The maturity period of a CD depends on the terms and conditions set by the issuing bank.
Therefore, the correct statements are 1 and 2 only.
Community Answer
Consider the following statements regarding the certificate of deposi...
- Certificate of Deposit (CD): Organised in 1989, the CD is used by banks and issued to the depositors for a specified period ranging less than one year—they are negotiable and tradable in the money market.
- Since 1993 the RBI allowed the financial institutions to operate in it- IFCI, IDBI, IRBI (IIBI since 1997) and the Exim Bank—they can issue CDs for the maturity periods above one year and up to three years.
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Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer?
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Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer?.
Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements regarding the certificate of deposit. 1. It is used by banks and issued to the depositors for a specified period ranging less than one year.2. They are negotiable and tradable in the money market.3. Financial Institutions are allowed to issue CDs for the maturity periods up to 1 year only.Which of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice UPSC tests.
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