Explanation Savings account CD Money market Advantage It is easy to open and access. The terms and the amounts that can be deposited into a CD are flexible. Money market accounts offer higher rates of interest than other kinds of financial accounts, including passbook deposit accounts and regular bank deposits. Disadvantage Interest rates are lower compared to other types of accounts or investments. It’s not as liquid as a traditional savings account. Most money market accounts allow only a limited number of monthly withdrawals and transfers as per federal banking regulations.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN: 9780078747663

Author: McGraw-Hill

Publisher: Glencoe/McGraw-Hill School Pub Co

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Question

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 6.1, Problem 2R

To determine

To complete: The table with suitable advantages and disadvantages of savings account, CD, money market.

Expert Solution & Answer

Explanation of Solution

	Savings account	CD	Money market
Advantage	It is easy to open and access.	The terms and the amounts that can be deposited into a CD are flexible.	Money market accounts offer higher rates of interest than other kinds of financial accounts, including passbook deposit accounts and regular bank deposits.
Disadvantage	Interest rates are lower compared to other types of accounts or investments.	It’s not as liquid as a traditional savings account.	Most money market accounts allow only a limited number of monthly withdrawals and transfers as per federal banking regulations.

Chapter 6.1, Problem 1R

Chapter 6.1, Problem 3R

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