[Solved] Returns and Bond Ratings

Assignment Prompt & Instructions

[>Accounting homework help](https://www.sweetstudy.com/fields/business-finance-accounting)

## **Overview**

In this activity, you will complete calculations and research that will help you understand how to evaluate the return and risk on investments.

## **Instructions**

Respond to the following in a 1 to 2-page paper using the [Week6 Activity – Returns and Bond Ratings Template [DOCX]](https://canvas.strayer.edu/courses/30334/files/19668312?wrap=1 "cf_WK6 Activity_Returns and Bond Ratings Template.docx") [Download Week6 Activity – Returns and Bond Ratings Template [DOCX]](https://canvas.strayer.edu/courses/30334/files/19668312/download?download_frd=1).

1. You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in twenty-six 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.
– Calculate the present value of the payments you will receive. Show your calculations using formulas in your paper or in an attached spreadsheet file.
– Explain why there is a difference between the present value of the Strayer lottery jackpot and the future value of the twenty-six annual payments based on your calculations and the information provided.For your convenience, a [Week 6 Activity Worksheet [EXCEL]](https://canvas.strayer.edu/courses/30334/files/19668397?wrap=1 "cf_ FIN534_WK6 Activity_Worksheet.xlsx") [Download Week 6 Activity Worksheet [EXCEL]](https://canvas.strayer.edu/courses/30334/files/19668397/download?download_frd=1) is provided to help you with the calculations in this assignment. It is highly recommended that you use it to complete the activity, but it is not mandatory. In the worksheet:

– The available cells are shaded, and this is where you should enter the figures from the assignment questions.
– The formulas will calculate automatically. You do not need to enter figures into the locked cells.
– **Note:** If you would like to explore and review the formulas, you can unlock the sheet by going to the _Review_ tab and selecting _Unprotect Sheet_.
2. Discuss the risk and return indicated by different bond ratings. Support your answer with references to your research.
– Use various bond websites to locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Research the differences between the bond ratings, the required interest rates, and the risk. List the websites used as sources for this research.
– Identify the strengths and weaknesses of each rating.

For help with research, writing, and citation, access the [library](https://library.strayer.edu/) or review [library guides](https://library.strayer.edu/guides). You can also use the Notes to the Financial Statements that appear after the financial statements in the Annual (10K) Report, or you can use Management’s Discussion and Analysis in the Annual (10K) Report.

This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the [Library site](https://library.strayer.edu/sws) for all support. Check with your professor for any additional instructions.

## **Help Resources**

– [SWS Sample Paper [PDF]](https://canvas.strayer.edu/courses/30334/files/19668343?wrap=1 "SWS_Sample_Paper_09_07_2022.pdf") [Download SWS Sample Paper [PDF]](https://canvas.strayer.edu/courses/30334/files/19668343/download?download_frd=1)
– Check out this interactive tutorial: [Using Your Own Words: Preventing PlagiarismLinks to an external site.](https://media.capella.edu/CourseMedia/WRK100Element233751/wrapper.asp).

Week 6 Activity – Returns and Bond Ratings **Week 6 Activity – Returns and Bond RatingsCriteriaRatingsPts** Explain the difference between the present value of an amount of money and the future value. Support the answer with calculations. **56.25 to >50.61 ptsExemplary** Explained the difference between the present value of an amount of money and the future value. Supported the answer with calculations. **50.61 to >44.99 ptsCompetent** Explained the difference between the present value of an amount of money and the future value, but the explanation is incomplete. Provided the calculation answers, but the calculations are incorrect. **44.99 to >39.36 ptsNeeds Improvement** Explained present and future values of money but did not explain the differences. Did not support the answer with calculations. **39.36 to >0 ptsUnacceptable** Did not explain the difference between the present value of an amount of money and the future value. Did not support the answer with calculations./ 56.25 ptsDiscuss the risk and return indicated by different bond ratings. Support the answer with references to research. **56.25 to >50.61 ptsExemplary** Discussed the risk and return indicated by different bond ratings. Supported the answer with references to research. **50.61 to >44.99 ptsCompetent** Discussed the risk and return indicated by different bond ratings, but the discussion is incomplete. Supported the answer with references to research, but the references do not support the answer. **44.99 to >39.36 ptsNeeds Improvement** Discussed the risk and return indicated by different bond ratings, but the discussion is incorrect. Did not support the answer with references to research. **39.36 to >0 ptsUnacceptable** Did not discuss the risk and return indicated by different bond ratings. Did not support the answer with references to research./ 56.25 ptsWrite a paper that is clear, includes appropriate writing mechanics, and follows SWS formatting requirements. **12.5 to >11.24 ptsExemplary** Writing has very few spelling, punctuation, and grammatical errors; few fragments, comma splices, and run-ons. 0–2 errors present. **11.24 to >9.99 ptsCompetent** Writing has spelling, punctuation, and grammatical errors that are distracting in a few places; few fragments, comma splices, and run-ons. 3–4 errors present. **9.99 to >8.74 ptsNeeds Improvement** Writing has spelling, punctuation, and grammatical errors that are distracting in some places. 5–6 errors present. **8.74 to >0 ptsUnacceptable** Writing has spelling, punctuation, and grammatical errors, fragments, comma splices and run-ons that distract from the message. More than 6 errors present./ 12.5 ptsTotal Points: 0

– [\
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cf_FIN534_WK6Activity_Worksheet.xlsx](https://www.sweetstudy.com/files/cf-fin534-wk6activity-worksheet-xlsx "cf_FIN534_WK6Activity_Worksheet.xlsx")
– [\
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cf_WK6Activity_ReturnsandBondRatingsTemplate.docx](https://www.sweetstudy.com/files/cf-wk6activity-returnsandbondratingstemplate-docx "cf_WK6Activity_ReturnsandBondRatingsTemplate.docx")