Choose an ideal bank assumption

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1. From below choose an ideal bank assumption.

Interest rates are higher for loans than deposits.

There are service charges and transaction fees.

Interest rates for different durations are not the same.

Interest rates do not depend on the size of principal.

2. Over the past 4 years, you observed the following quoted rates on Commercial Paper, for face values of $1,000 and 14 days to maturity. In excel, compute and graph the prices, bond equivalent rates, and effective annual rates for each year.

Quoted Yield

2016 75bps

2015 125bps

2014 -25bps

2013 102bps

Reference no: EM131839839

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