Compare the price of the bonds sold by ethan to bonds

Assignment Help Accounting Basics

Reference no: EM13615532

Ethan Jones is an investment broker. Recently he contactedpotential investors and offered to sell them bonds that were payingan 8% annual rate of interest. He noted that the bonds were payinga much higher return than other investments and that similar bondswere selling at a real rate of 6% interest. The bonds had a 10-year maturity and paid interest semiannually. Several investorspurchased the bonds because of the high rate of interest but laterwere concerned to learn that the maturity value of $ 1,000 per bondwas considerably less than the $ 1,350 they had paid for eachbond.

Compare the price of the bonds sold by Ethan to bonds yielding areal rate of 6%. What was the approximate real rate of returnearned by the investors? Did they have a right to be concernedabout their investments? Do you see any ethical problems withEthan's sales pitch?

Reference no: EM13615532

Questions Cloud

An exit poll of 1000 randomly selected voters found that : an exit poll of 1000 randomly selected voters found that 515 favored candidate a. is the race too close to call? answer

Garcia orchards amp processing company has been taking : garcia orchards amp processing company has been taking bidsfor three new tractors. goldbaum equipment has made an offer

To verify this we selected nine of these cars and each car : a car commercial advertises that a certain brand of car averaged at least 33 miles per gallon of gasoline. to verify

Draw the tree for oranges decision problem and determine : the management of orange computers was considering launching a new product called whopper101. the problem was that if a

Compare the price of the bonds sold by ethan to bonds : ethan jones is an investment broker. recently he contactedpotential investors and offered to sell them bonds that were

Compute the working capital the current ratio and the quick : date pertaining to the current position of sprice pine medicalcompany are as

It is estimated that the arrival rate to the drink stand : it is estimated that the arrival rate to the drink stand during a typical peak hour on a peak day will be 100 customers

For january february and march prepare aschedule of monthly : juans taco company has restaurants infive college towns. juan wants to expand into austin and college station andneeds

System development overview hi i need your help in : hi i need your help in completing my assignment. could you guys please help me out. there is a case study in the first

User Account

All Pages