Returns and Bond Ratings

Week 6 Activity: Returns and Bond Ratings

Student Name

FIN534

Professor’s Name

Date of Submission

FIN534 Student, please delete these instructions prior to submission. Please replace ‘Student Name,’ Professor’s Name, and ‘Date of Submission’ with your name, the professor’s name and the date you submit this assignment. Ex. August 13, 2025.

Returns Bonds and Ratings

FIN534 Student, please delete these instructions plus any instructions or question prompts in red after typing your answers. Each response should consist of 3 (three) or more sentences. This template includes paragraph headers. Please do not remove the headers. REMOVE ALL ITALICS and RED font before submission. Please see the sample assignments posted under My Professor within the course.

Type your Introductory Paragraph Here.

Present Value of Lottery Jackpot

Insert your typed data here.

Insert your typed data here:

-n

Where:

· PMT=xxxxxxxxxx (annual payment)

· n=xx (number of years)

· r = = monthly rate → converted to effective annual rate:

Reff ​= (1+0.10/12)12 − 1 ≈ xxxxxx (xxxxxx)

Substituting:

-26

Thus, the present value of the jackpot is about $xxxxxx million, even though the advertised jackpot is $XX million.

Explanation of the Difference

Insert your typed data here.

Bond Ratings: Risk and Return

Insert your typed data here.

Examples of Ratings

· AAA – Insert the definition in your own words here. Discuss the quality, the risk, and how investors may view this type of bond, the type of yield an investor would receive, the strengths and the weaknesses. Feel free to use the Excel template to gather your data before typing it here.

· BBB – Insert the definition in your own words here. Discuss the quality, the risk, and how investors may view this type of bond, the type of yield an investor would receive, the strengths and the weaknesses. Feel free to use the Excel template to gather your data before typing it here.

· CCC – Insert the definition in your own words here. Discuss the quality, the risk, and how investors may view this type of bond, the type of yield an investor would receive, the strengths and the weaknesses. Feel free to use the Excel template to gather your data before typing it here.

· D – Insert the definition in your own words here. Discuss the quality, the risk, and how investors may view this type of bond, the type of yield an investor would receive, the strengths and the weaknesses. Feel free to use the Excel template to gather your data before typing it here.

Provide a short summary of the data you typed above, here.

Conclusion

(Indent your paragraph. Type a short conclusion here, AFTER you have written your entire paper and after you have written your introduction. You will summarize what you discussed in this paper in your conclusion paragraph in 3 (three) to 5 (five) sentences. I recommend copy/pasting your introductory paragraph here then changing the words just slightly and adding a nice ending sentence.)

FIN534 Student, if you follow this formula, you will achieve success on this assignment. Happy writing and make sure you watch the instructional video that accompanies this template. Don't forget to delete these instructions from the template prior to submitting in our online course room. Your paragraphs should be typed, black font, non-italics, and non-bolded font. Please DO NOT FORGET TO REMOVE THE ITALICS.

Sources

1. Insert your source in SWS format.

2. Insert your source in SWS format.

3. Insert your source in SWS format.

1