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Said banks aim is to offer the lowest mortgage rates relying on large volumes, and can issue $100 million in mortgages this month and is
Said banks aim is to offer the lowest mortgage rates relying on large volumes, and can issue $100 million in mortgages this month and is presented with the following funding options.
type | maturity | interest rate |
CD | 1 year | 0.75% |
Bond | 10 years | 1.90% |
Bond | 20 years | 2.52% |
a. Choose a (one) funding option and motivate your choice. Note: you need to choose one funding option at this point. (2 marks)
b. Discuss potential risks from
i) Your chosen funding option (3 marks)
ii) Purple Banks pricing strategy. (3 marks)
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