# FIN 534 – Homework Set #2

INSTRUCTIONAL MATERIALS
Required Resources
Brigham, E. F., & Ehrhardt, M. C. (2017). Financial management (15th ed.). Mason, OH: South-Western Cengage Learning.

Supplemental Resources
Criniti, A. (2013). The necessity of finance. Philadelphia, PA: Criniti Publishing Company.
Fidelity Investments, Inc. SWOT analysis. (2013). Fidelity Investments, Inc. SWOT Analysis, 1-8.
Hasseltoft, H. (2012). Stocks, bonds, and long-run consumption risks. Journal of Financial & Quantitative Analysis, 47(2), 309-332. doi: 10.1017/S0022109012000075
Kumar, A. (2009). Who gambles in the stock market? Journal of Finance, 64(4), 1889-1933.

Homework Set #2: Chapters 4 & 5 (Work it on Excel Sheet) (Request 2 Different Excel Sheet – Mine and Hubby)
Worth 100 points
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.

Points: 100

Homework Set 2: Chapters 4 and 5

Criteria

Unacceptable Below 70% F

Fair
70-79% C

Proficient
80-89% B

Exemplary
90-100%A

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%

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.

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%

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.

3. Clarity, writing mechanics, and formatting requirements.
Weight: 10%

More than 6 errors present

5-6 errors present

3-4 errors present

0-2 errors present