Investment Options for $10 Million Lottery Win

Running head: MARKETING
Marketing
Name
ID
Course
Unit
Lecturer
Date

MARKETING 2
Term deposits
Bo & Capponi, (2016) said that the idea term deposit in finance refers to a fixed-term investment
which involve depositing money to a financial institution for a specific period of time. The
deposited money mature within the agreed period of time with some additional amount on the
amount deposited. The maturity period may range from one month, three months, six months or
even a year. Winning $10 million in a lottery is an opportunity for investment. One of the
investment is the term deposits. However, there are major attributes in term deposit that an
investor must consider before venturing to the investment. Some of the attributes that this
assignment will discuss include the period of maturity, the interest rate the bank is offering and
the minimum deposit that the bank requires.
a. The interest rate
It is the first thing to consider when choosing term deposit. Said, (2017) stated that
financial institutions offer fixed interest rates which lets the investor now what he or she
is going to earn at the end of the term. Considering three financial institutions one giving
the interest rate of 2.4% p.a with a minimum deposit of $1,000, second one 1.8%p.a
minimum deposit $1000 and third one 2.4% p.a with a minimum deposit of $250,00.
With the $10 million lottery the option of 2.4% p.a with a minimum deposit would be
better for six months since it will give higher earnings.
b. The deposit term
A term deposit always last for a specific period of time. However, going for long period
of time can guarantee higher interest rate hence more returns according to Chandra,
(2017). For example considering a financial institution that gives options of six months
and one year with 2.4% per annum interest. Using the $10 million lottery.

MARKETING 3
Six months = 0.5*2.4*$10^6*0.01=$120,000
One year= 2.4*$10^6*0.01=$240,000
The important thing is that I must choose realistic period because withdrawing the money
before time attracts huge penalties according to Stowell, (2017). There are there attributes
which include interest payment method and frequency
Equity
Edmans, Fang & Lewellen, (2017) stated that equity is an investment where an investor buys and
hold shares of stocks in a stock market from firms or individuals. The profits is the dividends and
the capital earning from the stocks. However, some of the attributes in this financial asset
include:
a. Stability of the company.
For me to invest $10 million in a company’s shares, I must predict the future of the
company. Each faces a period where its stock loses value. Such cases mainly happen
when the company is facing market upheaval and economic challenges. If there is a
possibility of fluctuations in the market then there is no need of investing $10 million as I
may risk losing it.
b. The debt to equity ratio
Many companies have certain amount of debts in their balance sheets. It is good to invest
the money to a company that have a lot of assets compared to the liabilities. For example,
the best debt to equity ratio should be 0.30 or less than that to ensure that there is no
much risk while investing the lottery money.
c. The earnings growth