BCO224 \u00b7 Financial Markets \u00b7 Task brief & rubrics<\/p>\n
Task<\/p>\n
This task is individual and consists of 2 exercises and 1 question on Debt instrument market prices and yields and the mutual fund industry (NAV and important<\/p>\n
concepts)<\/p>\n
Exercise 1:<\/p>\n
Suppose there are two bonds you are considering:<\/p>\n
Bond A Bond B<\/p>\n
Maturity (years) 20Y 30Y<\/p>\n
Annual Coupon rate (%) 12% 8%<\/p>\n
Par Value 1000\u20ac 10000\u20ac<\/p>\n
a) If both bonds had a required rate of return of 10%, what would the bonds\u2019 prices be?<\/p>\n
b) Re-calculate the prices of the bonds if the required return falls to 9%. Could you explain why the price increases or decreases given this change in<\/p>\n
required return?<\/p>\n
Exercise 2:<\/p>\n
Calculate the NAV of the following fund, assuming 35,000 shares are outstanding. Calculate the percentage change in the NAV of the fund on April 29th 2022.<\/p>\n
Stock Shares owned price<\/p>\n
PYPL 3,000 $ 117.65<\/p>\n
TWTR 5,000 $ 50.98<\/p>\n
PG 9,000 $ 154.62<\/p>\n
NVDA 6,000 $ 259.31<\/p>\n
RTX 2,000 $ 98.81<\/p>\n
Besides the underlying securities listed above, the fund shows on the Balance Sheet<\/p>\n
Cash ______________________________________________ $ 155,000.-<\/p>\n
Liabilities ___________________________________________ $ 18,500.-<\/p>\n
An investor comes the day after computing the above NAV and invests quarter million USD in the fund. Assume no fees or expenses. The money manager buys<\/p>\n
2,000 shares of PayPal and 1,500 of Twitter.<\/p>\n
a) Will the NAV increase or decrease? Why?<\/p>\n
b) Calculate the return on the investor\u2019s shares. How many did he buy with 250k$?<\/p>\n
Question:<\/p>\n
Compare carefully Mutual Funds, Index Funds and ETFs. Explain clearly what the benefits and reasons are for investing in a Mutual Fund, Index Fund and ETFs.<\/p>\n
Investment companies attempt to explain to investors the nature of the risk the investor incurs when buying shares in their m utual funds and other investment<\/p>\n
funds. Scrutinize their products and their risk Assessments. Students present their findings and their return on investment. The aim of this assessment is to<\/p>\n
familiarize students with the structure and operation of the main funds, such as Mutual Funds, Index Funds and ETFs, and specifically with the risk-return profile<\/p>\n
and preferences of investors.<\/p>\n
Formalities:<\/p>\n
\u2022 Wordcount: no requirement for the exercises other than displaying details on the computations. For the question 500 \u2013 800 words.<\/p>\n
\u2022 Cover, Table of Contents, References and Appendix are excluded of the total wordcount.<\/p>\n
\u2022 Font: Arial 12,5 pts.<\/p>\n
\u2022 Text alignment: Justified.<\/p>\n
\u2022 The in-text References and the Bibliography have to be in Harvard\u2019s citation style.<\/p>\n
Submission: Week 12, Sunday May, 1st at 23.59 \u2013 Via Moodle (Turnitin).<\/p>\n
Weight: This task is a 40% of your total grade for this subject. It assesses the following learning outcomes:<\/p>\n
\u2022 Outcome 1: Understand and apply the yield\/price relationship and mechanism for debt instruments.<\/p>\n
\u2022 Outcome 2: Perform computations on the NAV and understand and apply the differences between NBV, NAV and market price and their consequences<\/p>\n
for both the incumbent and the investor.<\/p>\n
\u2022 Outcome 3: Understand the mutual fund industry with all their benefits and challenges for ethical and compliant functioning.<\/p>\n
Rubrics<\/p>\n
Descriptor<\/p>\n
9-10 The student demonstrates an excellent understanding of the concepts.<\/p>\n
8-8.9 The student demonstrates a good understanding of the concepts.<\/p>\n
7-7.9 The student demonstrates a fair understanding of the concepts. 6-6.9 The student demonstrates some, but insufficient understanding of the<\/p>\n
concepts.<\/p>\n
3-5.9 The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although the relationship between them is not understood by the student.<\/p>\n
1-2.9 The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts.<\/p>\n
0 The student leaves the question blank or che ats.<\/p>\n
Points are stated at the end of each question.<\/p>\n
—–<\/p>\n
Task brief and rubrics for BCO224 Financial Markets<\/p>\n
Task<\/p>\n
This is an individual task that comprises of two exercises and one question about debt instrument market pricing and yields, as well as the mutual fund business (NAV and essential terms).<\/p>\n
concepts)<\/p>\n
1st Exercise:<\/p>\n
Suppose there are two bonds you are considering:<\/p>\n
Bond A Bond B<\/p>\n
Maturity (years) 20Y 30Y<\/p>\n
Annual Coupon rate (%) 12% 8%<\/p>\n
Par Value 1000\u20ac 10000\u20ac<\/p>\n
a) If both bonds had a required rate of return of 10%, what would the bonds\u2019 prices be?<\/p>\n
b) Re-calculate the prices of the bonds if the required return falls to 9%. Could you explain why the price increases or decreases given this change in<\/p>\n
required return?<\/p>\n
Exercise 2:<\/p>\n
Calculate the NAV of the following fund, assuming 35,000 shares are outstanding. Calculate the<\/p>\n","protected":false},"excerpt":{"rendered":"
BCO224 \u00b7 Financial Markets \u00b7 Task brief & rubrics Task This task is individual and consists of 2 exercises and 1 question on Debt instrument\u2026<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7316,7318,7317,7315,7319,7321],"tags":[642,618,8825,576,116,631,19,643,473,633,630,628,450,597,594,626,635,574,622,624,620,621,619,623,617,625,627,634,629,632,644,645,42,66],"class_list":["post-112604","post","type-post","status-publish","format-standard","hentry","category-best-dissertation-writers-uk","category-british-dissertation-writers","category-dissertation-help-online","category-dissertation-writing-services-uk","category-help-with-dissertation-writing","category-uk-dissertation-help","tag-apps-that-write-essays-for-you-free","tag-assignment-writing-services-in-usa","tag-bes","tag-best-dissertation-writing-services","tag-best-essay-writing-service","tag-best-paper-writing-services","tag-best-research-paper-writing-services-in-usa","tag-best-website-to-write-my-essay","tag-cheap-essay-writing-service","tag-cheap-research-paper-writing-service","tag-college-paper-writing-service","tag-dissertation-help-online","tag-dissertation-writing-services","tag-dissertation-writing-services-illegal","tag-dissertation-writing-services-near-me","tag-dissertation-writing-services-usa","tag-essay-writing-service","tag-free-dissertation-writing-services","tag-homework-essay-writer","tag-homework-essay-writer-free","tag-homework-help-global","tag-homework-help-services","tag-homework-help-usa","tag-homework-writing-help","tag-homework-writing-service","tag-legit-research-paper-writing-services","tag-legitimate-dissertation-writing-services","tag-research-paper-writer-online-free","tag-research-paper-writing-services-online","tag-research-paper-writing-websites","tag-write-my-essay-for-me-cheap","tag-write-my-essay-for-me-tik-tok","tag-write-my-essay-free","tag-write-my-paper"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/112604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=112604"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/112604\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=112604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=112604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=112604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}