Practicing Success
They can be issued to individuals, corporations, and companies during periods of tight liquidity when the deposit growth of banks is slow, but the demand for credit is high. Which of the following is being referred to here? |
Commercial papers Call money Commercial bill Certificate of deposit |
Certificate of deposit |
Certificates of deposit (CD) are unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions. They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high. They help to mobilize a large amount of money for short periods |