A bank accepts a deposit for $50 million by issuing a 90-day NCD with interest at 6%.

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A bank accepts a deposit for $50 million by issuing a 90-day NCD with interest at 6%.

(a) What is the NCD's face value?

(b) The depositor decides to sell the NCD at a market yield of 6.5% after holding it for 55 days. What proceeds do she receive?

Related Book For answer-question

Bond Markets Analysis and Strategies

ISBN: 978-0133796773

9th edition

Authors: Frank J.Fabozzi

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Posted Date: May 30, 2023 05:59 AM

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A bank accepts a deposit for $50 million by issuing a 90-day NCD with interest at 6%.

Question:

Expert Answer:

a To determine the face value of the NCD we can use the formula Face Value Deposit 1 Interest Rate T... View the full answer

Bond Markets Analysis and Strategies

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