Question
ava is looking for a safe and secure way to save money for her future goals. After discussing her options with a financial advisor, she learns about a Certificate of Deposit (CD). What is the primary purpose of a Certificate of Deposit (CD)?
To earn a fixed rate of interest over a specific period
To minimize risk through diversification
To provide a flexible investment option
To earn a fixed rate of interest over a specific period
To minimize risk through diversification
To provide a flexible investment option
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Answered by
GPT-4o mini
The primary purpose of a Certificate of Deposit (CD) is **to earn a fixed rate of interest over a specific period**. CDs are time deposits offered by banks and credit unions, where money is deposited for a predetermined time frame at a fixed interest rate, offering a relatively safe way to save money while accruing interest.
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