Ask Question
BusinessBusiness
23 February, 11:03

Last year, Myron purchased a $10,000 certificate of deposit with a 3% rate of interest from his bank. The government reported that prices, on average, have fallen by 5% during the current year. Which of the following can be concluded as a result of this transaction? a. Myron loses, while the bank gains. b. Myron gains, while the bank remains unaffected. c. Myron gains, while the bank loses.

+1
Answers (1)
  1. 23 February, 13:40
    0
    c. Myron gains, while the bank loses.

    Explanation:

    A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.

    Therefore, since the period is predetermined and the rate is fixed for that period, any drop in interest rate during the duration of the deposit to the time of maturity will be a loss to the bank.

    Hence, The government reported that prices, on average, have fallen by 5% during the current year will be unfavorable to the bank.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Last year, Myron purchased a $10,000 certificate of deposit with a 3% rate of interest from his bank. The government reported that prices, ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
President's salaries, depreciation of office furniture, and office supplies are
Answers (1)
The services market sells diverse services such as legal advice, auto repair, and dry cleaning, and this market represents 75 percent of all industrial firms. Which of the following is another such service firm?
Answers (1)
Brief Exercise 4-10 The balance sheet debit column of the worksheet for Jolie Company includes the following accounts: Accounts Receivable $12,500, Prepaid Insurance $4,500, Cash $4,100, Supplies $5,200, and Debt Investments (short-term) $7,600.
Answers (1)
Smart Services performed $6,000 of services. Their customer paid $1,000 of the amount right away but charged the remaining amount. To record this transaction, the business would: A.
Answers (1)
Which of the following is true of the process-costing system? a. It uses multiple work-in-process accounts for manufacturing firms. b. It can be used only by service firms. c. It is complicated and more expensive than a job-order costing system. d.
Answers (1)
New Questions in Business
A salesperson receives a weekly salary of $500. In addition, $5 is paid for every item sold in excess of 200 items. How much extra is received from the sale of 215 items?
Answers (1)
The Market Outlet has a beta of 1.38 and a cost of equity of 14.945 percent. The risk-free rate of return is 4.25 percent. What discount rate should the firm assign to a new project that has a beta of 1.25?
Answers (1)
Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey is contributing $200,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $200,000 and a tax basis of
Answers (1)
On January 1, 2021, Corvallis Carnivals borrows $10,000 to purchase a delivery truck by agreeing to a 6%, three-year loan with the bank. Payments of $304.22 are due at the end of each month, with the first installment due on January 31, 2021.
Answers (1)
Runner's warehouse purchased digital watches for $92.99. its markup rate is 25% based on the selling price. what is the selling price
Answers (1)
Home » Business » Last year, Myron purchased a $10,000 certificate of deposit with a 3% rate of interest from his bank. The government reported that prices, on average, have fallen by 5% during the current year.
Sign Up Forgot Password?