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A bank has issued a six-month, $2 million negotiable CD with a 0.52% quoted annual interest rate (iCD, sp). (a) (8 points) Calculate the bond
A bank has issued a six-month, $2 million negotiable CD with a 0.52% quoted annual interest rate (iCD, sp). (a) (8 points) Calculate the bond equivalent yield and the EAR on CD. (b) (4 points) How much will the negotiable CD holder receive at maturity? (c) (12 points) Immediately after the CD is issued, the secondary market price on the $2 million CD falls to $1,998750. Calculate the new bond equivalent yield, the secondary market quoted yield iCD, sp, the, and the EAR on the $2 million face value CD
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