Please Help: Finance Exam tommorow

Discussion in 'Trading' started by BA736, Nov 23, 2008.

  1. BA736


    So this is valid in this fourm I would first like to say good luck to Citi and I hope their common stock does not get wiped out.

    I have a finance exam tommorow and I missed class the day he gave us a handout on pricing of CD's Im sure its pretty easy but a google search only turned up advertisments offering rates etc.

    I need to know how to price Certificate of deposits (CD) with

    -Price given yield
    -Yield given price
    -Holding period return

    If anyone has the quick formula to do this that would be great.

    This is the example of a problem on the test

    Example of Computational Problems

    II. You purchased in the secondary market a 120-day CD with 6% coupon 30 days after it was issued at a price of 1.01 per $1 of principal. You held the CD for 60 days and sold the CD at a market yield of 4%. Assume $100 (million) of principal for the CD. Note: you can use a principal value of $1 in your calculation.

    (i) Find the maturity value of the CD.

    (ii) Find the yield of the CD at the time of purchase.

    Is this anything like pricing bonds because we had to find the exact same thing in our bonds chapter using the 360 day rule and all that? If it's the same I can prob figure it out.

    Thanks for any help given
  2. No, it's not valid in this forum. You may get some responses in the "Do my homework for me" forum, though.
  3. wenzi


    Not the right forum.

    And you are over thinking this anyway.