Hi David, the link which you attached as a correction to the below question is not working anymore. Could you pls clarify, how we got the desired result. I am referring to 2011 T3.Hull-Chapters-5&6.pdf
168.3. An investor has funds invested in a German money market instrument that pays in Euros with an interest rate of 6.0% per annum. What is the interest earned on EUR 1,000,000 from January 1st, 2011 to March 1st, 2011?
a) $11,638
b) $11,800
c) $11,836
d) $12,000
Incorrect calculation listed in the doc -
168.3. B. $11,800 Most money markets, including US money markets and Euro money markets, use ACT/360. Days between January 1st and March 1st = 31+28 = 59 Interest earned = 59/360 * 6.0% * EUR 1,000,000 = $11,800
Regards,
atandon
168.3. An investor has funds invested in a German money market instrument that pays in Euros with an interest rate of 6.0% per annum. What is the interest earned on EUR 1,000,000 from January 1st, 2011 to March 1st, 2011?
a) $11,638
b) $11,800
c) $11,836
d) $12,000
Incorrect calculation listed in the doc -
168.3. B. $11,800 Most money markets, including US money markets and Euro money markets, use ACT/360. Days between January 1st and March 1st = 31+28 = 59 Interest earned = 59/360 * 6.0% * EUR 1,000,000 = $11,800
Regards,
atandon
