Brous, Peter; G. Buchanan, Bonnie; Orcutt, Tony - In: Managerial Finance 40 (2014) 9, pp. 864-882
Purpose – The “raise your rate” (RYR) certificate of deposit (CD) allows investors to raise the rate on their CD to the current market rate over the life of the CD. The purpose of this paper is to present a binomial option pricing model to value this option to raise the rate. The model...