Business
Business, 02.11.2020 16:30, bayloann3928

Suppose you have $10,000 to invest. A broker phones you with some information you requested on certain junk bonds. If the company issuing the bonds posts a profit this year, it will pay you a 40 percent interest rate on the bond. If the company files for bankruptcy, you will lose all you invested. If the company breaks even, you will earn a 10 percent interest rate. Your broker tells you there is a 50 percent chance that they will break even and a 20 percent chance that the company will file for bankruptcy. Your other option is to invest in a risk-free government bond that will guarantee 8 percent interest for 1 year. A) What is the expected interest rate (rate of return) for the junk bond investment

answer
Answers: 2

Other questions on the subject: Business

image
Business, 22.06.2019 09:30, ameliaduxha7
What are two benefits of consumer programs
Answers: 2
image
Business, 22.06.2019 11:30, fjjjjczar8890
Which of the following statements about cash basis accounting is true? a. it is more complicated than accrual basis accounting. b. the irs allows all types of corporations to use it. c. it follows gaap standards. d. it ensures the company always knows how much cash flow it has.
Answers: 2
image
Business, 22.06.2019 22:50, chrisraptorofficial
Wendy made her career planning timeline in 2010. in what year should wendy's timeline start? a. 2013 o b. 2012 oc. 2010 o d. 2011
Answers: 2
image
Business, 23.06.2019 00:30, HottheadAnthony7234
Shelly bought a house five years ago for $150,000 and obtained an 80% loan. now the home is worth $140,000 and her loan balance has been reduced by $12,000. what is shelly's current equity?
Answers: 3
Do you know the correct answer?
Suppose you have $10,000 to invest. A broker phones you with some information you requested on certa...

Questions in other subjects:

Konu
English, 03.10.2020 01:01
Konu
Mathematics, 03.10.2020 01:01