Suppose That the Current Rates on 60 and 120-Day GICs

question 96

Short Answer

Suppose that the current rates on 60 and 120-day GICs are 1.50% and 1.75% simple interest, respectively. An investor is weighing the alternatives of purchasing a 120-day GIC versus purchasing a 60-day GIC and then reinvesting its maturity value in a second 60-day GIC. What would the interest rate on 60-day GICs have to be 60 days from now for the investor to end up in the same financial position with either alternative?

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Definitions:

Broader Politics of Inclusion

Policies and practices aimed at ensuring equal participation and rights for all members of society, often emphasizing diversity and equity.

Material Experiences

The physical and tangible interactions and experiences individuals have with objects and environments in their daily lives.

Revolutionary Potential

The capacity or possibility for radical societal or structural change, often associated with social movements or ideologies.

Semiotics of Materiality

An approach that studies how material objects convey meaning and how they participate in systems of signification.