Question
A bank has issued a six-month, $2.3 million negotiable CD with a 0.50 percent quoted annual interest rate ( i CD, sp ). a. Calculate
A bank has issued a six-month, $2.3 million negotiable CD with a 0.50 percent quoted annual interest rate (iCD, sp). a. Calculate the bond equivalent yield and the EAR on the CD. (Round answer to the third decimal place) b. How much will the negotiable CD holder receive at maturity? (Round answer to the nearest whole number) c. Immediately after the CD is issued, the secondary market price on the $2 million CD falls to $2,298,700. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the $2.3 million face value CD. (Round answer to the fourth decimal place)
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