First, read the case Calculating & Disclosing Bond Yields: Ethics and Mechanics.
Be sure to read the Notes at the bottom of the case, including:
“The term “estimated yield” is essentially synonymous to the term “current yield.” Textbooks define current yield as the bond’s coupon payment divided by the current market value of the bond. Brokerage statements report what they term estimated yield, which is the client’s projected annual income from a series of bonds (i.e. aggregate coupon income) divided by the aggregate market value of those bonds.
The EMMA website and search function can be accessed here http://emma.msrb.org/.”
Additional readings (not required, but recommended by the case study’s author)
Financial Industry Regulatory Authority (FINRA) (2016), Bond Basis: Yields That Matter More. Retrieved from http://www.finra.org/investors/bond-yield-and-return
Securities and Exchange Commission (SEC), General Information on the Regulation of Investment Advisers. Retrieved from https://www.sec.gov/divisions/investment/iaregulation/memoia.htm
Zweig, J (2015, Oct. 30), “How Muni Bonds ‘Yield’ 4% in a 2% World”, The Wall Street Journal. Retrieved from http://on.wsj.com.ezproxy.umgc.edu/1RDOCmp
Second, answer the questions. In your initial response to the topic you have to answer all questions:
Examine the brokerage statement contained in the case. How would the stated “estimated yield” compare to the yield to maturity for an investor who purchased the bonds on the statement date at current market prices?
Are you concerned by the ethical behavior presented in the case? Describe the dilemma and explain what you would do. Justify your response.
Reflection – the students also should include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.
also extremely difficult and close to impossible as multiple people are required to conduct a study of research. In order to reach a knowledge claim, the definition of many of these terms must be operationalized. The production of knowledge means utilizing proper research methods based on the area of study in order to reach a conclusion. Collaboration is another term that refers to working together in order to produce or create something. Working in a group effectively allows for a greater combined effect. Individual is the last term that refers to a single person working to create and establish knowledge. The knowledge claim about the production of knowledge being a collaborative task rather than an individual task has been proven to be true through various studies and articles from the natural sciences and the human sciences. Personal and shared knowledge proves the production of knowledge being a collaborative task in the natural sciences and human sciences; shared knowledge refers to the collaboration while personal knowledge refers to an individual. In abnormal psychology, collaboration can be seen through experiments explaining reliability and validity of diagnosis whereas in biology, new findings about cancer and markers involve collaboration.
The human sciences is an area of study with the aim to broaden the understanding of the human world. This involves many subjects including psychology. There are many types of psychology involved in the human sciences such as abnormal psychology, social psychology, developmental psychology, and more. Each of these also approach collaboration in a unique way. A study in abnormal psychology was completed by David Rosenhan, a professor from Stanford University, in 1973: this experiment is most commonly known as the Rosenhan Experiment or the Thud Experiment with the aim of challenging the reliability and validity of psychiatric diagnosis. There were a total of eight subjects who attempted to gain admittance into the psychiatric ward of a hospital. The participants called the hospital for diagnosis appointments and worked together to find a way to explain their condition in a way to ensure each of the 8 participants gained admittance into the hospital. They claimed they were hearing voices, an existential symptom that arises due to a meaningless life; all of the subjects were admitted as there was no mention of existential psychosis in literature. Through this, they were able to use shared knowledge as information was contributed by a group of people. After entering the ward, they stopped showing pseudo symptoms and acted as ordinary people. Even while in the psychiatric ward, the participants collaborated in order to maintain consistency between their ‘conditions.’ Each participant began to take notes about their lives in the ward. They originally took notes secretly due to their fear of the warden, but after realizing that nobody cared, they began to do this publicly, allowing public communication and collaboration. To complete the study, they continuously questioned the staff about ideas such as them being discharged to test their obdurate behavior towards the participants. The psychiatrists were not able to reliably distinguish normal people from those with an illness. A diagnostic method that makes any such errors cannot be considered valid or reliable. Collaboration was used greatly in this study as all e