Originally posted on Fixed Income Alternatives:
This is Part 2 of a series where I will occasionally review Market Linked Certificates of Deposit (MLCDs) that have recently matured. As a brief refresher, all MLCDs offer 100% principal protection, supported by the FDIC to statutory limits.
I am reviewing today a 5-year JPMorgan CD issued 28 May 2010, that matured on 29 May 2015. It was based on 100% participation in the JPMorgan Efficiente (USD) Index. The CUSIP was 48123YKC9.
This CD marked the initial level of the index, when it was issued, at 99.65. At maturity, the index was at a level of 125.75. That is a change of +26.192%. For every $1,000 invested in this CD, it paid $1,261.92 at maturity. That is an average of 5.24%/year, non-compounded. There were no coupons paid; it was a lump-sum at maturity.
Here is an approximate view of the…
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