y=4

Question 2, round your answer to two decimal places (15 marks) a. A bank has issued a four-month, $6,000 negotiable CD with an effective annual interest rate of (2% + Y x 0.5%).- i. Calculate the market quoted yield and bond equivalent yield on the CD. (3 marks) ii. How much will the negotiable CD holder receive at maturity? (3 marks) iii. Immediately after the CD is issued, the secondary market price on the CD falls to $6,030. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the CD. (3 marks) b. You plan to purchase a house for $5,000,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. Your bank offers you the following two options for payment:- Option 1: Mortgage rate of (4 + 0.1 XY) percent and 3 points. Option 2: Mortgage rate of 4.65 percent and 1 point. Which option should you choose? (6 marks) . . Question 2, round your answer to two decimal places (15 marks) a. A bank has issued a four-month, $6,000 negotiable CD with an effective annual interest rate of (2% + Y x 0.5%).- i. Calculate the market quoted yield and bond equivalent yield on the CD. (3 marks) ii. How much will the negotiable CD holder receive at maturity? (3 marks) iii. Immediately after the CD is issued, the secondary market price on the CD falls to $6,030. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the CD. (3 marks) b. You plan to purchase a house for $5,000,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. Your bank offers you the following two options for payment:- Option 1: Mortgage rate of (4 + 0.1 XY) percent and 3 points. Option 2: Mortgage rate of 4.65 percent and 1 point. Which option should you choose? (6 marks)