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The Amount the exporter will receive at maturity is 1,008,000.00. I am unable to figure out the 2 middle answers. Thanks in advance! The time
The Amount the exporter will receive at maturity is 1,008,000.00. I am unable to figure out the 2 middle answers. Thanks in advance!
The time from acceptance to maturity on a $1,008,000 banker's acceptance is 30 days. The importer's bank's acceptance commission is 2.25 percent and the market rate for 30 -day B/As is 6.25 percent. What amount will the exporter receive if he holds the B/A until maturity? If he discounts the B/A with the importer's bank? Also determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter. If the exporter's opportunity cost of capital is 11 percent, should he discount the B/A or hold it to maturity? (Do not round intermediate calculations. Round "Maturity value" to 2 decimal places. Round "Bond equivalent yield" as a percent rounded to 2 decimal places.)Step by Step Solution
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