Question

a certificate of deposit (cd) differs from a traditional savings account in what way?
a. cds are a riskier investment
b. cds include the purchase of stocks
c. cds have a low interest rate
d. cds must remain untouched for a fixed period of time

all of the following are advantages of bundling insurance except what?
a. convenience
b. increases insurance options
c. less complicated
d. potential saving of money

Explanation:

First Question (CD vs Savings Account)

To determine how a CD differs from a traditional savings account, we analyze each option:

• Option a: CDs are not typically considered riskier than savings accounts (both are low - risk, with savings accounts often more liquid but CDs having fixed rates). So this is incorrect.
• Option b: CDs do not involve purchasing stocks. Stocks are a different type of investment. So this is incorrect.
• Option c: CDs usually have higher interest rates than traditional savings accounts to compensate for the fixed - term commitment. So this is incorrect.
• Option d: CDs have a fixed term (e.g., 6 months, 1 year, 5 years) during which the funds must remain untouched to get the agreed - upon interest rate. Traditional savings accounts allow more frequent withdrawals. This is the correct difference.

To find the non - advantage of bundling insurance, we analyze each option:

• Option a: Bundling insurance (e.g., home and auto with one company) is convenient as you deal with one provider. This is an advantage.
• Option b: Bundling insurance usually limits options as you are tied to one insurer's products, rather than increasing options (you would have more options by shopping around different insurers). This is not an advantage.
• Option c: Having one insurer for multiple policies is less complicated than dealing with multiple insurers. This is an advantage.
• Option d: Insurers often offer discounts for bundling, leading to potential money savings. This is an advantage.

Answer:

d. CDs must remain untouched for a fixed period of time

Second Question (Bundling Insurance Advantages)