Instructions
Review the rubric to make sure you understand the criteria for earning your grade.
In your textbook, read Chapter 7.
To help you further understand the chapter, download and review the PowerPoint file, Chapter 7 – Interest Rates and Bond Valuation.
Review the "Bond Market" videos that are linked within the Resources section of this page.
Navigate to the Discussion page and respond to the following prompts:
Funding: What are the key differences between using bonds to finance capital projects and issuing stock for that purpose?
Ethics Consideration:
A major scandal broke in 1996 when allegations were made that Moody’s Investors Service, Inc. was issuing ratings on bonds it had not been hired to rate, in order to pressure issuers to pay for their service.
In a Wall Street Journal story dated May 2, 1996, it was reported that after choosing to use rating services other than Moody’s, officials in Chippewa County, Michigan, received a letter from the executive vice president warning that the “absence of a rating ... might imply that we believe that there exist deficiencies” in the financing arrangements.
Further, Moody’s billed the county anyway, “as part of a long-standing policy.”
Moody’s actions resulted in an antitrust inquiry by the U.S. Justice Department and the departure of several of the firm’s senior management.
How do bond investors rely on bond ratings to make their investment decisions? What is unethical in this situation?
Support your position with at least one biblical principle with a specific Bible verse that you feel is relevant to the situation (explain how and why it applies).
Your discussion should be based on the chapter and videos, as well as other resources that can contribute to the discussion.
Your initial post should be 150 to 300 words in length and include at least one academic source that is properly cited. Your initial post is due by the end of the fourth day of the workshop.
Respond to two of your classmates’ postings, writing as if you were reviewing their postings in an academic journal. Your discussion responses should therefore answer the following questions as applicable:
Are your classmates’ arguments articulate and logical? Are their facts correct?
Are your classmates’ interpretations reasonable and consistent with experts in the field? Are your classmates consistent with both the substance and intent of their references?
Your discussion responses should not focus on whether or not you agree with your classmates, but how well they present their positions. Each response should be at least 150 words in length and cite at least one academic source. Please strive to make your discussion responses either extend the scholarly discussion in a productive direction, or offer thoughtful analysis that helps your classmates deepen their own understanding.
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