Construct a choice table for interest rates

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Reference no: EM131808945

A stockbroker has proposed two investments in lowrated corporate bonds paying high interest rates and selling below their stated value (in other words, junk bonds). The bonds are rated as equally risky

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∗At maturity the bondholder receives the last interest payment plus the bond's stated value.

(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 25%?

Reference no: EM131808945

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