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Rashonda Williams is a financial consultant to Cornish Inc., a real estate syndicate. Cornish finances ano develops commercial real estate (office buildings) projects. The completed

Rashonda Williams is a financial consultant to Cornish Inc., a real estate syndicate. Cornish finances ano develops commercial real estate (office buildings) projects. The completed projects are then sold as limited partnership interests to individual investors. The syndicate makes a profit on the sale of these partnership interests. Rashonda provides financial information for prospective investors in a document called the offering "prospectus." This document discusses the financial and legal details of the limited partnership investment. One of the company's current projects is called JEDI 2, and has the syndicate borrowing money from a local bank to build a commercial office building. The interest rate on the loan is \( 6.5 \% \) for the first four years. After four years, the interest rate jumps to \( 9 \% \) for the remaining 20 years of the loan. The interest expense is one of the major costs of this project and significantly affects the number of renters needed for the project to break even. In the prospectus, Rashonda has prominently reported that the break-even occupancy for the first four years is \( 65 \% \). This is the amount of office space that must be leased to cover the interest and general upkeep costs during the first four years. The \( 65 \% \) break-even point is very low compared to similar projects and thus communicates a low risk to potential investors. Rashonda uses the \( 65 \% \) break-even rate as a major marketing tool in selling the limited partnership interests. Buried in the fine print of the prospectus is additional information that would allow an astute investor to determine that the break-even occupancy jumps to \( 95 \% \) after the fourth year when the interest rate on the loan increases to \( 9 \% \). Rashonda believes prospective investors are adequately informed of the investment's risk. Is Rashonda behaving ethically? Explain your

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