Carly wants to buy and operate an ice-cream truck but doesn't have the financial resources to start the
business. She borrows $20,000 from her friend Freddie, to whom she promises an interest rate of 7
percent, and gets another $30,000 from her friend Sam, to whom she promises a third of her profits.
What best describes this situation?
A bond tends to pay a high interest rate if it is
a. a short-term bond rather than a long-term bond.
b. a municipal bond exempt from federal taxation.
c. issued by the federal government rather than a corporation.
d. issued by a corporation of dubious credit quality.
Support your answer using example(s).
Discuss and evaluate the main advantage of mutual funds.
(10 marks)
(8 marks)
(7 marks)
Fig: 1