A large bank is issuing negotiable CDs of $1 million for 90 days with an interest rate of 2%. What is the amount received at maturity by the investor, and what is the annual effective compound yield (y*) ?
A) $1 million and 2%
B) $1.005 million and 2.05%
C) $1.05 million and 2.50%
D) None of the above
Correct Answer:
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