Question

How are Company Fixed Deposits different from Bank Fixed Deposits?

a.

Company Fixed Deposits have higher interest rates

b.

Company Fixed Deposits have lower risk exposure

c.

Company Fixed Deposits have a shorter lock-in period

d.

Company Fixed Deposits have a higher risk exposure and offer higher returns

Posted under IC 89 Management Accounting

Answer: (d).Company Fixed Deposits have a higher risk exposure and offer higher returns Explanation:Companies with higher risk exposures try to reward investors for the extra risks they are taking by investing in the company, explaining why Company Fixed Deposits offer higher returns.

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