Memorandum

Phase 1(B)
1) Obtain the most recently filed report on Form 10-K for: American Eagle Outfitters, Inc. (NYSE: AEO) filed March

13,2014 (http://www.sec.gov/Archives/edgar/data/919012/000119312512117468/d277416d10k.htm)
2) Read Item 1, Item 1A and Item 1B, Items 2, 3, 4, 4A, 5, 9, 9A and 9B of the form 10-K for the company you selected as

your primary company.
3) Prepare a summary of the relevant information contained in each of the items identified in step 2.
4) Obtain the closing stock price for your company’s common stock on the filing date (3/13/14 for AEO) and the stock

price on or about that same date for each of the previous 5 years. You will end up with 6 data points, 2014 thru 2009.

DO NOT USE THE DATA INCLUDED IN ITEM 5 OF THE 10-K. ”well be provided->(March 13/2014: stock price 12.90), (March

13/2013: stock price 20.84), (March 13/2012: stock price 16.55), (March “there is no 13?. 14/2011: stock price 15.41),

(March “there is no 13?. 12, 2010: stock price 18.74), (March 13/2009: stock price 10.34).
5) Prepare a CQAD memorandum summarizing the information presented in Parts 1 and 2 of the report on Form 10-K EXCLUDING

Items 6, 7, 7A and 8. >>”Include a table or graph (with data points)”<< indicating the closing stock prices obtained in

step 4 and a summary of the dividend history of the company.

Since Bond A and Bond B have the same coupon rates, Ms. Brown asked Jennifer to compare which bond price will drop more when the yield to maturity increases by 1%? Since Bond C and Bond D have the same maturity date, Ms. Brown asked Jennifer to compare which bond price will drop more when the yield to maturity increases by 1%?
5) Based on the results in 1) through 4), Jennifer needed to report to Linda Brown about which bonds have higher interest rate risk and why.
Suppose that you are Jennifer Bake. Please write a short memo to address 1) through 5). The calculation results are attached to the memo.