In which situation would a certificate of deposit (cd) be the best banking choice? samuel is setting money aside but still needs emergency access to it. hafsa wants a guaranteed return, and won’t need the money for several years. darren is looking for an investment that has a very high interest rate. raj is looking for an investment with a fast return so he can reinvest.

b. Hafsa wants a guaranteed return, and won’t need the money for several years.  

A certificate of deposit is a savings instrument with a fixed maturity and a fixed interest rate.

However, it requires funds to be locked up until maturity.  

There is a very heavy penalty upon withdrawal before the maturity date.

It is a suitable investment for those having extra cash that they won’t need for some time and those looking for a guaranteed return.

The answer is B. I just took the test

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