A bank has issued a six-month, $2 million negotiable CD with a 0.52 percent quoted annual interest
Question:
A bank has issued a six-month, $2 million negotiable CD with a 0.52 percent quoted annual interest rate (iCD, sp). (LG 5-2)
a. Calculate the bond equivalent yield and the EAR on the CD.
b. How much will the negotiable CD holder receive at maturity?
c. Immediately after the CD is issued, the secondary market price on the $2 million CD falls to $1,998,750. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the
$2 million face value CD. LO.1
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Kirti Kaushal
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Related Book For 
Financial Markets And Institutions
ISBN: 9781259919718
7th Edition
Authors: Anthony Saunders, Marcia Cornett
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