alleryStart learning →A longer CD term usually earns a higher rate, except when which condition applies?
AAn inverted yield curve
BA rising GDP rate
CA low inflation rate
DA budget surplus
Answer & Solution
Correct answer: A. An inverted yield curve
When the yield curve is inverted, short-term rates exceed long-term ones, so a longer term does not pay more.
Keep practising Money Market
Browse all Money Market questions for CA Foundation, or explore more Business Economics topics.
Related questions
Eurodollar deposits are deposits in US dollars held where?Trading companies often buy bankers' acceptances to pay whom?Federal funds are usually lent on what basis?Accrual instruments are issued at face value and mature at what amount?How does a T-bill investor earn a return?Treasury bills (T-bills) are zero-coupon securities maturing in how long?What does a CD ladder strategy do?What usually applies to a withdrawal from a CD before maturity?