Sally Wishes to Invest $4500 in a 2-Year CD with an Interest

question 85

Multiple Choice

Sally wishes to invest $4500 in a 2-year CD with an interest rate of 5.3% each year and compounded monthly. What is the annual percentage yield for Sally's CD (rounded to the nearest hundredth) ?

• A) 5.43%
• B) 1.05%
• C) 5.3%
• D) 11.16%
• E) 0.44%

Determine the impact of changes in a Normal distribution on specific data points and intervals.

Understand the impact of team-based projects on the frequency and necessity of meetings.

Identify the first principle in running effective meetings.

Recognize the importance of announcing the adjournment time at the start of the meeting.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Forward Interest Rate

Rate of interest for a future period that would equate the total return of a long-term bond with that of a strategy of rolling over shorter-term bonds.

Yield Curve

A graph that plots the interest rates at a set point in time of bonds having equal credit quality but differing maturity dates, typically used to predict economic changes.

Maturity

The fixed date in the future at which the principal amount of a bond or other financial instrument is scheduled to be repaid.