Practicing Success
Assertion: Certificates of deposit (CD) are unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions.
Reasoning: Certificate of deposit 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. |
Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A. Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. Assertion (A) is true but Reasoning (R) is not correct. Assertion (A) is not true but Reasoning (R) is correct. |
Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A. |
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 mobilise a large amount of money for short periods. |