Use the following information to estimate the marginal cost of issuing a $ 1 million CD paying 3 25 percent interest It has a one year maturity and the following estimates apply relative to the balance obtained Acquisition costs 1 8 of 1 percent FDIC insurance 1 12 of 1 percent required reserves pe...

Use the following information to estimate the marginal cost of issuing a $ 1 million CD paying

Question:

Use the following information to estimate the marginal cost of issuing a $ 1 million CD paying 3.25 percent interest. It has a one- year and the following estimates apply relative to the balance obtained: Acquisition costs = 1/ 8 of 1 percent FDIC insurance = 1/ 12 of 1 percent required reserves percentage = 0 percent Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...