Negotiable certificate of deposit denominations

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1. Which of the following are typical negotiable certificate of deposit (NCD) denominations? Check all that apply.

-$300,000

-$900,000

-$1,000,000

-$4,000,000

2. Which of the following are characteristics of negotiable certificates of deposit (NCD)? Check all that apply.

-Their denominations are typically in multiples of $100,000.

-Their maturities are normally between 2 weeks and 1 year.

-Activity in their secondary market is moderate.

-They provide a return in the form of interest along with the difference between the secondary market selling price and the original purchase price.

3. Suppose Nick purchased an NCD a year ago on the secondary market for $993,000 and redeems it today upon maturity for $1,000,000 plus $44,000 in interest. The annualized yield on this NCD is:

-4.63%

-5.04%

-5.14%

-5.40%

Reference no: EM132813973

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