Question

Surfs-Up Security Savings is considering the problem of trying to raise $80 million in money market funds to cover a loan request from one of its largest corporate customers, which needs a six-week loan. Assume that market interest rates are at the levels indicated below:
Federal funds, average for week just concluded.... 1.98%
Discount window of the Federal Reserve bank ..... 2.25%
CDs (prime rated, secondary market):
One month.................. 2.52%
Three months................. 2.80%
Six months .................. 3.18%
Eurodollar deposits (three months) ......... 3.00%
Commercial paper (directly placed):
One month .................. 2.33%
Three months.................. 2.70%



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  • CreatedOctober 31, 2014
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