Question
Bank A offers a 2-year certificate of deposit (CD) that pays 8 percent compounded annually.Bank B offers a 2-year CD that is compounded semiannually.Assume that
Bank A offers a 2-year certificate of deposit (CD) that pays 8 percent compounded annually.Bank B offers a 2-year CD that is compounded semiannually.Assume that the CDs have identical risk.What is the nominal rate that Bank B would have to offer to make you indifferent between the two investments?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
