A bank has issued a six-month, $2.8 million negotiable CD with a 0.55 percent quoted annual interest rate (i_{CD, sp}).

a. Calculate the bond equivalent yield and the EAR on the CD.

b. Immediately after the CD is issued, the secondary market price on the $3 million CD falls to $2,799,000. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the $2.8 million face value CD