Question
Gary Larson is well known for his exporting activities but has never used a Bankers Acceptance so has a few questions he would like assistance
Gary Larson is well known for his exporting activities but has never used a Bankers Acceptance so has a few questions he would like assistance with.
The discounted amount on a BA an exporter receives is $2,500,000, the amount the exporter receives if they hold to maturity is $2,550,000 and the face value is $2,600,000 on a 360 day BA.
a) Determine the bond equivalent yield the importers bank will earn from discounting the BA with the exporter. Answer as a decimal to 4 decimal places.
b) Determine the bond equivalent yield the exporter receives from discounting the BA. Answer as a decimal to 4 decimal places
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