Homework Question

Anonymous
timer Asked: Oct 18th, 2018
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Question Description

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link above.

A. You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in 26 equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the payments you will receive?

B. In your own words and using various bond websites, please locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Please describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.

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Points: 100 Criteria 1. You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in 26 equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the payments you will receive? Weight: 45% 2. In your own words and using various bond websites, please locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Please describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating. Weight: 45% 3. Clarity, writing mechanics, and formatting requirements. Weight: 10% Homework Set 2: Chapters 4 and 5 Unacceptable Below 70% F Fair 70-79% C Proficient 80-89% B Exemplary 90-100%A Did not submit or incompletely calculated the present value of the payments that would be received. Partially calculated the present value of the payments that would be received. Satisfactorily calculated the present value of the payments that would be received. Thoroughly calculated the present value of the payments that would be received. Did not submit or incompletely located one of the following bond ratings: AAA, BBB, CCC, and D. Did not submit or incompletely described the differences between the bond ratings. Did not submit of incompletely identified the strengths and weaknesses of each rating. Partially located one of the following bond ratings: AAA, BBB, CCC, and D. Did not submit or incompletely described the differences between the bond ratings. Partially identified the strengths and weaknesses of each rating. Satisfactorily located one of the following bond ratings: AAA, BBB, CCC, and D. Did not submit or incompletely described the differences between the bond ratings. Satisfactorily identified the strengths and weaknesses of each rating. Thoroughly located one of the following bond ratings: AAA, BBB, CCC, and D. Did not submit or incompletely described the differences between the bond ratings. Thoroughly identified the strengths and weaknesses of each rating. More than 6 errors present 5-6 errors present 3-4 errors present 0-2 errors present ...
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Tutor Answer

peachblack
School: University of Maryland

Attached.

Running head: HOMEWORK SET 2: CHAPTER 4&5

Homework Set 2: Chapter 4&5
Name
Course
Instructor
Date5

1

HOMEWORK SET 2: CHAPTER 4&5
Q1.
The Annual Interest Rate given is 9% (percent)
Compounded Period = 12 periods (equal annual installments)
Calculation of the monthly compounded interest rate = [9 / (100*12)] = 0.0075

Calculating the Effective Percentage Rate (EFF) is given by

Present value is given by:-

Q2.

2

HOMEWORK SET 2: CHAPTER 4&5

3

Bond ratings are ratings commonly given to a bond to show its credit quality and their
ove...

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Anonymous
awesome work thanks

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