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17. Earlier this year, you purchased $5,000 worth of an Spartan Power common stock. At the same time, your sister purchased $5,000 of Spartan Power's
17. Earlier this year, you purchased
$5,000 worth of an Spartan Power
common stock. At the same time,
your sister purchased $5,000 of
Spartan Power's senior debt with a
5% coupon at par. At the time of
purchase, he bond was rated AAA.
Last week the company announced it
invented a new battery that would
likely go into every new electric car
manufactured over the next 10 years.
Which investment has the greatest
chance of earning a large return
based on the new invention?
a. Your common stock investment
b. Your sister's Bond Investment
c. Both have equal probability of
receiving the same amount
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