Stated Annual Interest Current Market Price with Bond value Рayment Commission Gen $1000 $ 67 $480 Dev RJR 1000 98 630 (a) Construct a choice table for interest rates from 0% to 100%. (b) Which, if any, of the bonds should you buy if your MARR is 20%? (c) Are there professional ethics standards for stockbrokers in the U.S.? What are some common ethical pitfalls?

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter7: Types And Costs Of Financial Capital
Section: Chapter Questions
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A stockbroker has proposed two investments in low-rated corporate bonds paying high interest rates and selling at steep discounts (junk bonds). The bonds are rated as equally risky and both mature in 15 years.

Stated
Annual Interest
Current Market Price with
Bond
value
Рayment
Commission
Gen
$1000
$ 67
$480
Dev
RJR
1000
98
630
(a) Construct a choice table for interest rates from 0% to 100%.
(b) Which, if any, of the bonds should you buy if your MARR is 20%?
(c) Are there professional ethics standards for stockbrokers in the U.S.?
What are some common ethical pitfalls?
Transcribed Image Text:Stated Annual Interest Current Market Price with Bond value Рayment Commission Gen $1000 $ 67 $480 Dev RJR 1000 98 630 (a) Construct a choice table for interest rates from 0% to 100%. (b) Which, if any, of the bonds should you buy if your MARR is 20%? (c) Are there professional ethics standards for stockbrokers in the U.S.? What are some common ethical pitfalls?
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