Author Question: You have just won 50,000 on your Scratch and Win ticket, but you won't be awarded the money until ... (Read 216 times)

magmichele12 · **on:** Jul 10, 2018

You have just won 50,000 on your Scratch and Win ticket, but you won't be awarded the money until your 40th birthday, 20 years from now. If the appropriate discount rate is 15, what is the present value of your winnings?

A) 3,055.01
B) 3,513,27
C) 2,656.53
D) 3,048.78
E) 3,067.49

Question 2

According to bond rating agencies, a bond rated AAA has a higher probability of default than a bond with a BBB rating.

Indicate whether the statement is true or false.

miss.ashley · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

A

Answer to Question 2

Answer: FALSE
Explanation: According to bond rating agencies, a bond rated AAA has a LOWER amount of default risk than a bond with a BBB rating.