A 3-month (90-day) USD deposit is 5.5625% and 6-month (180-day) USD deposit is 5.75%. What is the 3x6 USD deposit rate?
A) 5.8342%
B) 5.8561%
C) 5.8425%
D) 5.75%

Question

Quizplus · Accepted Answer

To calculate the rate of a 3x6 deposit, we need to use the formula:
(1+R36)^6/4 = (1+R90/4)^2 * (1+R180/4)^4
where R36 is the unknown 3x6 rate.
Plugging in the given rates, we get:
(1+R36)^6/4 = (1+5.5625/100)^2 * (1+5.75/100)^4
Solving for R36, we get:
R36 = ((1+5.5625/100)^2 * (1+5.75/100)^4)^(4/6) - 1
R36 = 5.8561%
Therefore, the best choice is B - 5.8561%.

A 3-Month (90-Day) USD Deposit Is 5