Question

Stephanie wants to take $10,000 out of her bank savings account and put it in a certificate of deposit (CD) that charges a penalty if she withdraws the money before two years are over. What is the economic trade-off in this investment?

1.higher returns for more risk
2.higher returns for higher liquidity
3.higher returns for higher volatility
4.higher returns for lower liquidity

Answer 1

1. Higher returns for more rish