A business that invests in a federal “CD” (certificate of deposit, where they basically loan the government money in order to gain interest payments on it) would be earning:

Question

a. passive income

b. active income

c. balanced income

d. stock income

Answer 1

A business that invests in a federal “CD” (certificate of deposit) would be earning:

a. passive income

Passive income is income earned with little to no effort on the part of the recipient, such as interest earnings from a CD.