30 Frank purchases a fixed-interest guaranteed investment certificate (GIC) for $2,000 from a bank in July 2018. As per the contract, Frank Will interest at maturity, which is in July 2023. Frank has an immediate need for cash and he decides to use the funds in the GIC before its maturity date. Which of the following outcomes can be expected? VFM3RmtwSE5xaTZ2SWc3aWs1UGYxUT09 → a. O Frank can withdraw the funds without any losses as fixed-interest GICs are redeemable. b. O Frank cannot withdraw funds from his GIC before its maturity date. c. O Frank will have to pay penalties to use the funds in the GIC before its maturity date. d. O Frank can waive any penalties if he can prove to the bank that there's a financial need.
30 Frank purchases a fixed-interest guaranteed investment certificate (GIC) for $2,000 from a bank in July 2018. As per the contract, Frank Will interest at maturity, which is in July 2023. Frank has an immediate need for cash and he decides to use the funds in the GIC before its maturity date. Which of the following outcomes can be expected? VFM3RmtwSE5xaTZ2SWc3aWs1UGYxUT09 → a. O Frank can withdraw the funds without any losses as fixed-interest GICs are redeemable. b. O Frank cannot withdraw funds from his GIC before its maturity date. c. O Frank will have to pay penalties to use the funds in the GIC before its maturity date. d. O Frank can waive any penalties if he can prove to the bank that there's a financial need.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:30 Frank purchases a fixed-interest guaranteed investment certificate (GIC) for $2,000 from a bank in July 2018. As per the contract, Frank will receive the principal
interest at maturity, which is in July 2023. Frank has an immediate need for cash and he decides to use the funds in the GIC before its maturity date. Which of the following outcomes
can be expected?
VFM3RmtwSE5xaTZ2SWc3aWs1UGYxUT09 →
a. O Frank can withdraw the funds without any losses as fixed-interest GICs are redeemable.
b. O Frank cannot withdraw funds from his GIC before its maturity date.
c. O Frank will have to pay penalties to use the funds in the GIC before its maturity date.
d. O Frank can waive any penalties if he can prove to the bank that there's a financial need.
EM30mtuS55x3T7?SWc3aWs1UGYxUT09?
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Step 1
An investor has invested in fixed interest GIC. He needs money prior to maturity. Several possible outcomes have been proposed on how he can get money from GIC before maturity date. We have to find the correct answer.
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