Multiple Choice
Lowering the discount rate has the effect of:
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7. Receivables and Investments
Introduction to Investments in Securities
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A ________ account is an account you use to buy investments like stocks, bonds, and mutual funds.
A
savings
B
brokerage
C
retirement
D
checking
Verified step by step guidance1
Understand the purpose of the question: It is asking about the type of account used to buy investments such as stocks, bonds, and mutual funds.
Review the definitions of the options provided: Savings accounts are typically used for storing money and earning interest, not for buying investments. Checking accounts are used for daily transactions and bill payments, not for investment purposes. Retirement accounts are specialized accounts for saving for retirement, often with tax advantages, but they are not general investment accounts.
Learn the definition of a brokerage account: A brokerage account is a type of financial account that allows individuals to buy and sell investments like stocks, bonds, mutual funds, and other securities.
Match the correct account type to the description in the question: Since the question specifies buying investments, the correct account type is a brokerage account.
Conclude that the correct answer is 'brokerage' based on the definitions and the purpose of the account described in the question.
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