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About risk and return indicated by different bond ratings

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Reference no: EM133182288

You have just won the 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.

Calculate the present value of the payments you will receive. 

Explain why there is a difference between the present value of the lottery jackpot and the future value of the 26 annual payments based on your calculations and the information provided.

Compare the information about risk and return indicated by different bond ratings. 

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.

Reference no: EM133182288

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