Question

What is one of the reasons why companies offer higher interest rates on their fixed deposits compared to bank fixed deposits?

a.

Companies have lower risk exposures.

b.

Companies want to attract more customers.

c.

Companies are legally required to offer higher rates.

d.

Companies compensate for higher risk by offering higher interest.

Posted under IC 89 Management Accounting

Answer: (d).Companies compensate for higher risk by offering higher interest. Explanation:Companies with higher risk exposures try to reward investors for the extra risks by offering higher interest rates.

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Q. What is one of the reasons why companies offer higher interest rates on their fixed deposits compared to bank fixed deposits?
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