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BUS 405 Week 5 Project Construct a well-diversified portfolio
http://www.homeworkmye.com/product/bus-405-week-5-project-construct-a-well-diversified-portfolio |
BUS 405 Week 5 Project Construct a well-diversified portfolio
http://www.homeworkmye.com/product/bus-405-week-5-project-construct-a-well-diversified-portfolio |
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Week One Week 1 – DQ1 - Blume’s Formula, Allocation, and Selection Week 1 – DQ2 - Money Market Funds Assignment Suppose you have $28,000 to invest. You’re considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $40 per share. You also notice that a call option with a $40 strike price and six months to maturity is available. The premium is $4.00. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $48 per share? What about $36 per share? Readings Chapter 5: The Stock Market Discussions Week 2 – DQ1 - Primary and Secondary Markets Week 2 – DQ2 - Contrarian Investing Assignment Week 2 – Assignment - Abbott Laboratories Problem After reading the Value Line figures and information on Abbott Laboratories in the Questions and Problems section of Chapter 6 (just before Problem 27), complete Problems 27, 28, 29, 30, and 31 and submit to your instructor. Show your calculations and in your response to problem 31 write a 100 to 200 word defense of your position as to the value of Abbott Laboratories stock at its current price of $50 per share. 27. What is the sustainable growth rate and required return for Abbott Laboratories? Using these values, calculate the 2010 share price of Abbott Laboratories Industries stock according to the constant dividend growth model. Discussions Week 3 – DQ1 - Forward Interest Rates
Week 3 – Assignment – Bootstrapping Chapter 10 Problem 31 Complete problem 31 of Chapter 10 (shown below), and submit to your instructor. Show your calculations and the algebraic manipulation of the price equation for the bond. In addition to solving the problem, write a 100 to 200 word essay on the term structure of fixed income securities. One method used to obtain an estimate of the term structure of interest rates is called bootstrapping. Suppose you have a one-year zero coupon bond with a rate of r1 and a two-year bond with an annual coupon payment of C. To bootstrap the two-year rate, you can set up the following equation for the price (P) of the coupon bond: /(1+r_1 )+(C_2+Par value)/(1+r_2 )^2 Because you can observe all of the variables except r2, the spot rate for two years, you can solve for this interest rate. Suppose there is a zero coupon bond with one year to maturity that sells for $949 and a two-year bond with a 7.5 percent coupon paid annually that sells for $1,020. What is the interest rate for two years? Suppose a bond with three years until maturity and an 8.5 percent annual coupon sells for $1,029. What is the interest rate for three years? Week 4 – DQ1 – Expected Returns and Deviation Week 4 – Assignment – Performance Metrics Chapter 13 Problem 22Complete Problem 22 in the Questions and Problems section of Chapter 13 (shown below). When you pick the best choice for your portfolio, defend your decision in a 100 - 200 word essay. Calculate the Sharpe ratio, Treynor ratio, Jensen’s alpha, information ratio, and R-squared for both funds and determine which is the best choice for your portfolio. Discussions Week 5 – DQ1 – Hedging with Futures Complete Concept Question 7 from Chapter 14: The town of South Park is planning a bond issue in six months and Kenny, the town treasurer, is worried that interest rates may rise, thereby reducing the value of the bond issue. Should Kenny buy or sell Treasury bond futures contracts to hedge the impending bond issue? Remember to complete all parts of the question and support your answers with examples from the text and other resources. Complete Concept Question 12 from Chapter 15: Recall the options strategies of a protective put and covered call discussed in the text. Suppose you have sold short some shares of stock. Discuss analogous option strategies and how you would implement them. (Hint: They’re called protective calls and covered puts.) Remember to complete all parts of the question and support your answers with examples from the text and other resources. Final Project Week 5 – Final Project – Construct a well-diversified portfolio The student will construct a well-diversified portfolio using an initial investment stake of $50,000 (the portfolio should use 95% of the fund, but they may not use more than $50,000). The student may include stocks, common or preferred; bonds, corporate or U.S. Treasury bonds; mutual funds; and futures contract or options. The student will use the closing prices from the first day of the class to determine the price of each issue. Only whole lots of any issues may be acquired, that is no less than 100 shares of common or preferred stock; no less than 5 corporate bonds or $10,000 for U.S. Treasury Bonds; no fewer than the minimum required investment for any mutual fund; and no fewer than 5 contracts for any option or futures position. The settlement date will be the first day of Week 3. The student does not have to use all of the above mentioned securities, but they must use more than one class. Transaction costs are ignored in the creation of the portfolio. |
BUS 405 Week 5 Project Construct a well-diversified portfolio
http://www.homeworkmye.com/product/bus-405-week-5-project-construct-a-well-diversified-portfolio
Final Project |
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BUS 405 Week 5 Project Construct a well-diversified portfolio
http://www.homeworkmye.com/product/bus-405-week-5-project-construct-a-well-diversified-portfolio |
BUS 405 Week 5 Project Construct a well-diversified portfolio
http://www.homeworkmye.com/product/bus-405-week-5-project-construct-a-well-diversified-portfolio |