"Suppose an investment bank is buying $50 million in long-term mortgage-backed securities, and finances the investment by borrowing 80% and paying for the other 20% out of equity. What is the bank's return on its equity investment if the value of the mortgage-backed securities increases by 10% during the year after they are purchased?"

(C)

Explanation:

Based on the scenario being described within the question it can be said that Engineer A should remain in consideration for the project, but not change his bid. This is mainly due to the fact that if Engineer A wants it he should stick to his decision and there is no evidence that the client is telling the truth about Engineer B's bid. The client may be benefiting from Engineer A bidding more.