FIN 550 FIN550week 1 to week
11 Complete Course
FIN 550 Week 1 Discussion
"Investment
Performance and Decisions" Please respond to the following:
·
From the eActivity, predict the performance of the DOW for the
next two years. Provide support for your prediction.
·
Analyze the factors that influence investment decisions at
different stages in an investor’s life cycle, and make a recommendation at
which stage the average investor should consider financial investments. Provide
support for your recommendation.
FIN 550 Week 1 Homework
·
Chapter 1: Problems 5(ad), 7, 9, and 12
·
Chapter 2: Problems 4(ab), 5(ab), and 6(ab)
·
•Chapter 1:
Problems 5(ad), 7, 9, and 12
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·
5. During the
past five years, you owned two stocks that had the following annual rates of
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·
return:
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·
Year Stock
T Stock B
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·
1 0.19 0.08
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·
2 0.08 0.03
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·
3 −0.12 −0.09
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4 −0.03 0.02
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5 0.15 0.04
·
·
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a. Compute the
arithmetic mean annual rate of return for each stock. Which stock is
·
·
most desirable by this
measure?
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·
b. Compute the
standard deviation of the annual rate of return for each stock. (Use
·
·
Chapter 1 Appendix if
necessary.) By this measure, which is the preferable stock?
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c. Compute the
coefficient of variation for each stock. (Use the Chapter 1 Appendix if
·
·
necessary.) By this
relative measure of risk, which stock is preferable?
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·
d. Compute the
geometric mean rate of return for each stock. Discuss the difference
·
·
between the arithmetic
mean return and the geometric mean return for each stock.
·
·
Discuss the differences
in the mean returns relative to the standard deviation of the
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·
return for each stock.
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·
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·
7. A stockbroker calls
you and suggests that you invest in the Lauren Computer Company.
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·
After analyzing the
firm’s annual report and other material, you believe that the distribution
·
·
of expected rates of
return is as follows:
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·
LAUREN COMPUTER CO.
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·
Possible Rate of
Return Probability
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−0.60 0.05
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−0.30 0.20
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−0.10 0.10
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0.20 0.30
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0.40 0.20
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0.80 0.15
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Compute the expected
return [E(Ri)] on Lauren Computer stock.
·
·
·
·
9 During the past year,
you had a portfolio that contained U.S. government Tbills, longterm
·
·
government bonds, and
common stocks. The rates of return on each of them were
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·
as follows:
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·
U.S. government
Tbills 5.50%
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·
U.S. government
longterm bonds 7.50
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·
U.S. common stocks
11.60
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During the year, the
consumer price index, which measures the rate of inflation, went
·
·
from 160 to 172 (1982
– 1984 = 100). Compute the rate of inflation during this year.
·
·
Compute the real rates
of return on each of the investments in your portfolio based on
·
·
the inflation rate.
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12. Assume
that the consensus required rate of return on common stocks is 14 percent. In
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·
addition, you
read in Fortune that the expected rate of inflation is 5 percent and the
·
·
estimated
longterm real growth rate of the economy is 3 percent. What interest rate
would you expect on U.S. government Tbills? What is the approximate risk
premium for
·
·
common stocks
implied by these data?
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•Chapter 1:
Problems 5(ad), 7, 9, and 12
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•Chapter 2:
Problems 4(ab), 5(ab), and 6(ab)
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4. a. Someone
in the 36 percent tax bracket can earn 9 percent annually on her investments
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·
in a
taxexempt IRA account. What will be the value of a onetime $10,000 investment
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·
in 5 years? 10
years? 20 years?
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b. Suppose the
preceding 9 percent return is taxable rather than taxdeferred and the taxes
·
·
are paid
annually. What will be the aftertax value of her $10,000 investment after 5,
10,
·
·
and 20 years?
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·
5. a. Someone
in the 15 percent tax bracket can earn 10 percent on his investments in a
taxexempt
·
·
IRA account.
What will be the value of a $10,000 investment in 5 years? 10
·
·
years? 20
years?
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b. Suppose the
preceding 10 percent return is taxable rather than taxdeferred. What will
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·
be the
aftertax value of his $10,000 investment after 5, 10, and 20 years?
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6. Assume that
the rate of inflation during all these periods was 3 percent a year. Compute
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·
the real value
of the two taxdeferred portfolios in problems 4a and 5a.
·
FIN 550 Week 2 Discussion
"Globalization and
Efficient Markets" Please respond to the following:
·
From the eActivity, analyze how national exchanges around the
world are linked and suggest which exchange most significantly impacts the U.S.
markets. Explain your rationale.
·
Analyze the most significant driver in an efficient market and
whether or not you would characterize the U.S. markets as efficient. Provide
support for your position.
FIN 550 Week 2 Homework
·
Chapter 4: Problems 4, 5, 6, and 7
·
Chapter 6: Problems 1, 2, 3, and 4
·
Chapter 4:
Problems 4, 5, 6, and 7
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·
4. You decide to sell
short 100 shares of Charlotte Horse Farms when it is selling at its yearly
·
·
high of $56. Your
broker tells you that your margin requirement is 45 percent and that the
·
·
commission on the
purchase is $155. While you are short the stock, Charlotte pays a $2.50
·
·
per share dividend. At
the end of one year, you buy 100 shares of Charlotte at $45 to close
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·
out your position and
are charged a commission of $145 and 8 percent interest on the
·
·
money borrowed. What
is your rate of return on the investment?
·
·
120 Part 1: The
Investment Background
·
·
Property of Cengage
Learning
·
·
5. You own 200 shares
of Shamrock Enterprises that you bought at $25 a share. The stock is
·
·
now selling for $45 a
share.
·
·
a. You put in a stop
loss order at $40. Discuss your reasoning for this action.
·
·
b. If the stock
eventually declines in price to $30 a share, what would be your rate of return
·
·
with and without the
stop loss order?
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6. Two years ago, you
bought 300 shares of Kayleigh Milk Co. for $30 a share with a margin
·
·
of 60 percent.
Currently, the Kayleigh stock is selling for $45 a share. Assuming no dividends
·
·
and ignoring
commissions, compute (a) the annualized rate of return on this investment
·
·
if you had paid cash,
and (b) your rate of return with the margin purchase.
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7. The stock of the
Madison Travel Co. is selling for $28 a share. You put in a limit buy order
·
·
at $24 for one month.
During the month the stock price declines to $20, then jumps
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·
to $36. Ignoring
commissions, what would have been your rate of return on this investment?
·
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What would be your
rate of return if you had put in a market order? What if
·
·
your limit order was at
$18?
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·
·
·
•Chapter 6:
Problems 1, 2, 3, and 4
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1. Compute the
abnormal rates of return for the following stocks during period t (ignore
differential
·
·
·
·
·
·
·
·
systematic
risk): Stock Rit Rmt
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B 11.5% 4.0%
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F 10.0 8.5
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T 14.0 9.6
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C 12.0 15.3
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E 15.9 12.4
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Rit = return for stock
i during period t
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Rmt = return for the
aggregate market during period t
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2. Compute the
abnormal rates of return for the five stocks in Problem 1 assuming the
following
·
·
systematic risk
measures (betas):
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·
Stock Î²i
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B 0.95
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F 1.25
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T 1.45
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C 0.70
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E −0.30
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3. Compare the
abnormal returns in Problems 1 and 2 and discuss the reason for the difference
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in each case.
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Chapter 6: Efficient
Capital Markets 179
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4. Look up the daily
trading volume for the following stocks during a recent fiveday period:
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• Merck
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• Caterpillar
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• Intel
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• McDonald’s
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• General Electric
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Randomly select five
stocks from the NYSE, and examine their daily trading volume for
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the same five days.
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a. What are the
average volumes for the two samples?
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b. Would you expect
this difference to have an impact on the efficiency of the markets for
·
·
the two samples? Why
or why not?
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FIN 550 Week 3 Discussion
"Portfolio
Management" Please respond to the following:
·
Assess the factors that contribute to someone being risk adverse
and how risk aversion may be diminished for investors.
·
Explain how a given investor chooses an optimal portfolio and
the most significant driver that determines if a diversified or single asset
will be used.
FIN 550 Week 3 Homework
·
Chapter 3: Problems 3, 4, and 5
·
Chapter 7: Problems 3(ad), 7(ae), and 8
·
Chapter 3
·
·
·
·
3. Using published sources (for example, The Wall Street Journal,
Barron’s, Federal Reserve Bulletin), look up the exchange rate for U. S.
dollars with Japanese yen for each of the past 10 years (you can use an average
for the year or a specific time period each year). Based on these exchange
rates, compute and discuss the yearly exchange rate effect on an investment in
Japanese stocks by a U. S. investor. Discuss the impact of this exchange rate
effect on the risk of Japanese stocks for a U. S. investor.
·
·
·
·
4. The following information is available concerning the
historical risk and return relationships in the U. S. capital markets:
·
·
·
·
U.S. CAPITAL MARKETS TOTAL ANNUAL RETURNS, 1990– 2011
·
Investment Category

Arithmetic Mean

Geometric Mean

Standard Deviation of
Return^{a}

Common Stocks

10.28%

8.81%

16.9%

Treasury Bills

3.54

3.49

3.2

Longterm government
bonds

5.10

4.91

6.4

Longterm corporate bonds

5.95

5.65

9.6

Real estate

9.49

9.44

4.5

·
·
·
·
^{a}Based on
arithmetic mean.
·
·
·
·
a. Explain why the geometric and arithmetic mean returns are not
equal and whether one or the other may be more useful for investment
decisionmaking.
·
·
·
·
b. For the time period indicated, rank these investments on a
relative basis using the coefficient of variation from most to least desirable.
Explain your rationale.
·
·
·
·
c. Assume the arithmetic mean returns in these series are normally
distributed. Calculate the range of returns that an investor would have
expected to achieve 95 percent of the time from holding common stocks.
·
·
·
·
5. You are given the following long run annual rates of return
for alternative investment instruments:
·
·
·
U.S. Government Tbills

3.50%

Largecap common stock

11.75

Longterm corporate bonds

5.50

Longterm government
bonds

4.90

Smallcapitalization
common stock

13.10

·
·
·
·
The annual rate of inflation during this period was 3 percent.
Compute the real rate of return on these investment alternatives.
·
·
Chapter 7
·
·
·
·
3. The following are the monthly rates of return for Madison
Cookies and for Sophie Electric during a six month period.
·
·
·
Month

Madison
Cookies

Sophie
Electric

1

0.04

0.07

2

0.06

0.02

3

0.07

0.10

4

0.12

0.15

5

0.02

0.06

6

0.05

0.02

·
·
·
·
Compute the following.
·
·
a. Average monthly rate of return Ri for each stock
·
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b. Standard deviation of returns for each stock
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c. Covariance between the rates of return
·
·
d. The correlation coefficient between the rates of return. What
level of correlation did you expect? How did your expectations compare with the
computed correlation? Would these two stocks be good choices for
diversification? Why or why not?
·
·
·
·
7. The following are monthly percentage price changes for four
market indexes.
·
·
·
Month

DJIA

S&P
500

Russell
2000

Nikkei

1

0.03

0.02

0.04

0.04

2

0.07

0.06

0.10

0.02

3

0.02

0.01

0.04

0.07

4

0.01

0.03

0.03

0.02

5

0.05

0.04

0.11

0.02

6

0.06

0.04

0.08

0.06

·
·
·
·
Compute the following.
·
·
a. Average monthly rate of return for each index
·
·
b. Standard deviation for each index
·
·
c. Covariance between the rates of return for the following
indexes:
·
·
d. The correlation coefficients for the same four combinations
·
·
e. Using the answers from parts (a), (b), and (d), calculate the
expected return and standard deviation of a portfolio consisting of equal parts
of (1) the S&P and the Russell 2000 and (2) the S&P and the Nikkei.
Discuss the two portfolios.
·
·
·
·
8. The standard deviation of Shamrock Corp. stock is 19 percent.
The standard deviation of Cara Co. stock is 14 percent. The covariance between
these two stocks is 100. What is the correlation between Shamrock and Cara
stock?
·
·
FIN 550 Week 4 Discussion
"Asset Analysis / Risk
and Return" Please respond to the following:
·
Recommend an alternative to the CAPM for analyzing capital
assets. Provide support for your recommendation.
·
Assess the effectiveness of using multifactor models to help
investors understand the relative risk exposures in their portfolios relative
to benchmark portfolios. Make a recommendation on how investor understanding
may be improved. Support your rationale
FIN 550 Week 4 Homework
If
you are using the Blackboard Mobile Learn IOS App, please click "View in
Browser."
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 8: Problems 6(ac), 8(ac), and 10(ac)
·
Chapter 9: Problems 3(ad), 5(ab), and 7(ad)
FIN 550 Week 4 Assignment 1 Portfolio Management
Assignment 1: Portfolio Management
Due Week 4 and worth 200 points
Write a five to seven (57) page paper in which you:
Assignment 1: Portfolio Management
Due Week 4 and worth 200 points
Write a five to seven (57) page paper in which you:
1.
Analyze the relationship between risk and rate of return, and
suggest how you would formulate a portfolio that will minimize risk and
maximize rate of return.
2.
Formulate an argument for investment diversification in an
investor portfolio.
3.
Address how stocks, bonds, real estate, metals, and global funds
may be used in a diversified portfolio. Provide evidence in support of your
argument.
4.
Evaluate the concept of the efficient frontier and how you will
use it to determine an asset portfolio for a specified investor.
5.
Consider the economic outlook for the next year in order to
recommend the ideal portfolio to maximize the rate of return for the short term
and long term. Explain the key differences between the short and long term.
6.
Use four (4) external resources to support your work. Note:
Wikipedia and other Websites do not qualify as academic resources.
Your assignment must
follow these formatting requirements:
·
Be typed, double spaced, using Times New Roman font (size 12),
with oneinch margins on all sides; citations and references must follow APA or
schoolspecific format. Check with your professor for any additional
instructions.
·
Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the date. The cover
page and the reference page are not included in the required assignment page
length.
The specific course
learning outcomes associated with this assignment are:
·
Evaluate portfolio performance and develop recommendations to
improve a firm’s investment performance.
·
Use technology and information resources to research issues in
corporate investment analysis.
·
Write clearly and concisely about corporate investment analysis
using proper writing mechanics.
FIN 550 Week 5 Discussion
"Business Risk and
Analysis / Investment Valuation" Please respond to the following:
·
Determine whether a steel company or a retail food chain would
have a greater business risk. Provide support for your rationale.
·
Discuss why you would not expect all industries to have a
similar relationship trend to the economy. Provide an example of two industries
that have a different relationship to the economy and explain the
difference.
FIN 550 Week 5 Homework
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 10: Problems 4(ab), and 5(ab)
·
Chapter 11: Problems 6, 8, and 10
FIN 550 Week 6 Discussion
"Stock Markets and
the Economy / Industry Analysis" Please respond to the following:
·
Assess the impact on the U.S. stock market when the Federal
Reserve increases the money supply, and whether or not you believe the impact
is predictable.
·
Describe an industry that you believe is in stage 2 of the
industry life cycle. Provide evidence that supports your analysis.
·
FIN 550 Week 6 Homework
If
you are using the Blackboard Mobile Learn IOS App, please click "View in
Browser."
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 12: Problems 4(ad), 7(ab), 8(ab)
·
Chapter 13: Problems 4, 5, 7(ac)
FIN 550 Week 7 Discussion
"Growth
Companies" Please respond to the following:
·
From the eActivity and based on the growth company selected,
assess why it is a growth stock and if that status is sustainable.
·
Evaluate whether or not P/E is an effective indicator of a
growth stock. Suggest an alternative.
FIN 550 Week 7 Homework
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 14: Problems 6, 7(ac), 8(ab), 10(ac), 11(ab), and
12(ab)
FIN 550 Week 8 Discussion
"Derivative Markets" Please respond to the following:
·
Analyze the complexities of the derivative markets and how the
reporting of derivatives may be deceiving to investors.
·
Make a suggestion for improving the methods for valuing
derivatives so that the reporting becomes more transparent for investors.
FIN 550 Week 8 Homework
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 20: Problems 3(ac), 5(ac), 8(ac), 9(ad), and 10(ad)
FIN 550 Week 9 Discussion
"Hedging" Please respond to the following:
·
Create a scenario where an investor would benefit from using
forward and future contracts to hedge an existing risk exposure.
·
Explain how an increase in interest rates may impact the
scenario you created.
FIN 550 Week 9 Homework
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 21: Problems 3(ae), 4(ac), 6(ac), 9(ab), 10(ac),
and 11(ac)
·
FIN 550 Week 9 Assignment 2 Highrisk Investments
Assignment 2: Highrisk Investments
Due Week 9 and worth 300 points
For this assignment, use the Internet to research highrisk investment brokerage firms that have been indicted or convicted of ethical violations to provide insight and understanding of this market segment.
Write a six to eight (68) page paper in which you:
Due Week 9 and worth 300 points
For this assignment, use the Internet to research highrisk investment brokerage firms that have been indicted or convicted of ethical violations to provide insight and understanding of this market segment.
Write a six to eight (68) page paper in which you:
1.
Explain why investors may be
attracted to highrisk investments such as exchangetraded derivatives, global
funds, and other complex investment vehicles.
2.
Analyze the risk associated with
exchangetraded derivatives, such as futures and options, and what brokers
might do to minimize the risk to investors.
3.
Discuss the challenges related to
regulating a complex global financial firm and make suggestions for regulatory
improvements.
4.
Analyze the ethical violations of the
company you researched.
5.
Discuss the consequences that you
believe to be appropriate for the senior management of the firm you researched
and the implications for brokers trading in highrisk investments.
6.
Create a scenario where you believe
the use of highrisk investments would be beneficial for the investor. Provide
support for your rationale.
7.
Use four (4) external resources to
support your work. Note: Wikipedia and other Websites do not qualify as academic
resources.
Your
assignment must follow these formatting requirements:
·
Be typed, double spaced, using Times
New Roman font (size 12), with oneinch margins on all sides; references must
follow APA or schoolspecific format. Check with your professor for any
additional instructions.
·
Include a cover page containing the
title of the assignment, the student’s name, the professor’s name, the course
title, and the date. The cover page and the reference page are not included in
the required page length.
The
specific course learning outcomes associated with this assignment are:
·
Analyze the derivatives market and
determine the use of derivatives to efficiently manage investment risks in an
investment portfolio.
·
Use technology and information
resources to research issues in corporate investment analysis.
·
Write clearly and concisely about
corporate investment analysis using proper writing mechanics.
FIN 550 Week 10 Discussion
"Options" Please respond to the following:
·
Create a scenario where an investor would benefit from using
option contracts to minimize risk.
·
Evaluate how models used for valuing stock options can be
adapted to other underlying assets such as stock indexes.
FIN 550 Week 10 Homework
Click
the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.
·
Chapter 22: Problems 3(ad), 5(ad), 7(ac), 10(ab), and 12
·
Chapter 24: Problems 3(ad), 6(ac), 8(ac), and 10(ac)
FIN 550 Week 11 Discussion
"Transfer It / Sum It Up" Please respond to the
following:
·
The textbook identified many different approaches to corporate
investment analysis. Sum up one analysis tool, application, and concept.
·
In 140 characters or less (like a Twitter Tweet) describe the concept
that will stick with you the most from class.
FIN 550 Week 11 Final Exam part 1 and 2
FIN 550 week 1 to week 11 Complete
Course