Question: Suppose that the above bank also owns a 1
Suppose that the above bank also owns a $ 1 million par value Treasury bond, purchased at par, with two years to maturity, paying $ 29,000 in semiannual interest, with a market value of $ 960,000. Determine the incremental cash flow effects if the bank sold this note and bought a two year taxable security yielding 6.2 percent with the proceeds.
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