Question: please do it in 10 minutes will upvote [2 marks] Part (b) Perform the following certificate of deposit calculations: i. Find the price of an
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please do it in 10 minutes will upvote
[2 marks] Part (b) Perform the following certificate of deposit calculations: i. Find the price of an 8 month 375,000 certificate of deposit, paying 2.75%, if it has 2 months remaining to maturity and short term interest rates are also 2.75%. [3 marks] ii. What is its price if short term interest rates increase to 3.15%? [1 mark] iii. Find the price of a 6 month 425,000 certificate of deposit, paying 3.5%, if it has 3 months remaining to maturity and short term interest rates are also 3.5%. [3marks] iv. What rate of return is offered by a 7 month certificate of deposit for 180,000, paying 4% which will mature in 2 months and is currently trading at 179,500? [1 marks] [Total 20 Marks]
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