This term is often used in describing changes in interest rates. The right to purchase a specific number of shares at a stated price within a fixed period of time. For each call option purchased, there is also a seller. This is often someone who owns the related common stock. An investment, often made with a bank, that generally provides a fixed yield for a given period of time, usually six months to five years.
CDs usually carry penalties for early withdrawal of funds.
Also, tax treatment of income from a CD can be a significant consideration. Commercial paper is typically sold to financial institutions and mutual funds. Interest is received by clipping the attached coupons as they mature and presenting them for payment. Tax law changes enacted in 1982 effectively prohibit the issuance of such bonds, but preexisting coupon bonds may be purchased in secondary markets. The relationship between the annual interest level of a security and its principal amount.