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QUESTION 13 What is wrong about Negotiable Certificates of Deposit (NCD)? Offer a premium above the T-bill yield in order to compensate for less liquidity

QUESTION 13

What is wrong about Negotiable Certificates of Deposit (NCD)?

Offer a premium above the T-bill yield in order to compensate for less liquidity and safety.

Provide a return in the form of interest along with the difference between the price at which the NCD is redeemed (or sold in the secondary market) and the purchase price.

Some investment bankers place their NCDs directly; others use a correspondent institution that specializes in placing NCDs.

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