Which feature most clearly distinguishes a demand deposit from a fixed-term deposit?
Correct answer: A. It can usually be withdrawn without waiting for maturity
- A. It can usually be withdrawn without waiting for maturity
- B. It always pays a higher rate of return
- C. It cannot be accessed through a bank
- D. It is recorded only in foreign currency
Explanation
A demand deposit can generally be withdrawn when the depositor requests it, subject to banking procedures. A fixed-term deposit is normally kept until an agreed maturity date and may carry withdrawal restrictions.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Finance and Banking Basics
Business finance covers capital requirements, sources of funds, budgeting, cash flow, investment decisions and basic financial statements and ratios. Banking includes commercial bank functions, deposits, loans, credit creation, interest and the role of a central bank, including its monetary policy and regulatory functions.
Practise Finance and Banking Basics
30 free Finance and Banking Basics MCQs from Introduction to Business, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Introduction to Business questions like this
Introduction to Business is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Finance and Banking Basics questions
A business has current assets of Rs. 240,000 and current liabilities of Rs. 120,000. What is its current ratio?
The time value of money means that a rupee received today is generally:
What is the simple interest on Rs. 8,000 at an annual rate of 6 percent for two years?
Open market operations by a central bank mainly involve the purchase and sale of:
Which statement best describes a bank's liquidity?
Compared with a bondholder, an ordinary shareholder generally has: