Week 1 Collaboration
Collaboration: Changes since the financial crisis
The financial system
has changed dramatically since the 2008 financial crisis (which actually
started in 2007). Also known as the Global Financial Crisis, it is considered
by many to have been the worst financial crisis since the Great Depression in
the 1930s. The financial crisis was triggered by a complex interplay of US real
estate overvaluation, policies that encouraged home ownership, questionable
trading and a myriad of other issues.
During this week,
you have already examined (via your Weekly Overview and Learning Resources)
some of the ways in which the system has changed because of (or as a reaction
to) said crisis. Moreover, you have done so while considering such themes as
political economy and analysis of risk.
Equipped with this
knowledge, in your first Collaboration, you will analyse how the financial
markets in your own country have changed as a result of the recent financial
crisis.
To prepare for this
Collaboration:
Identify the
financial markets available in the country in which you reside.
Research how those
financial markets have changed since the beginning of the financial crisis.
Identify the
responses, if any, of your country’s government, regulators and industries to
the financial crisis.
To complete this Collaboration:
By Sunday (Day 4):
For your Initial Response, in approximately 750–1,000 words, address
the following issues/questions:
Outline the main
financial markets that are available in your country.
Critically analyse
how financial markets in your country have changed since the recent financial
crisis.
Evaluate how the
government, regulators and industries of your country responded to the
financial crisis. Explain what you based your evaluation on and justify your
reasoning.
Fully justify all
your assumptions and claims using your own experience, the Learning Resources
and your own research. Cite your work using the Harvard Liverpool Referencing
System.
Submit your Initial Response to Turnitin and to
the Collaboration forum.
Until Wednesday (Day 7):
Participate in the Collaboration Forum by posting 3 to 5 responses to
your colleagues in which you:
Compare a
colleague’s country’s financial market to your own
Open a debate about
an analysis with which you disagree
Offer contributions
based upon your prior experience
Extend the discussion
into new but relevant areas
Model or promote
critical reflection from what you have read
You should aim to participate
with follow-on postings to your colleagues’ responses, making 3–5 significant
follow-up postings. Aim to spread your total collaboration discussions across 3
separate days of each week.
Your collaborative
participation will be assessed in three segments. Following the completion of
Week 3, you will receive summative feedback and an initial grade based upon
your participation in Weeks 1–3. At the end of the Week 5, you will receive
additional summative feedback and a second grade based upon your participation
in Weeks 4 and 5. At the end of the module, you will receive further summative
feedback and a third grade based upon your participation in Weeks 6–8. These
three assessment points will each form 5% of your End of Module grade, for a
total of 15% for your participation posts overall.
Week 2 Collaboration
Role of diversification and assets: Part 1
The actual realised return on investment is based on many factors,
including characteristics of assets used by investors. In general, investors
are attracted to opportunities that are domestic in nature, as opposed to
international and other far-distant opportunities. Therefore, a smart
foundation for a savvy investor is to study the main assets used by investors
of their own country. If you have not already, take a moment to review the
Weekly Overview and consider how the topics apply to the typical assets of your
own country. This will help inform your Collaboration this week, as your
challenge is to emulate those savvy investors and analyse the assets primarily
utilised by the investors in your home country.
To prepare for this Collaboration:
Review this week’s Learning Resources and Weekly Overview with a focus
diversification.
Research the main assets used by investors within your country.
Identify the asset classes of your country.
To complete this Collaboration:
By Sunday (Day 4),
in a response of approximately 750–1,000 words, address the following
issues/questions:
Describe the main assets used by investors in your country.
Evaluate the extent to which diversification is possible.
Analyse any major asset classes that are missing.
Analyse any asset classes unique to your
country.
Based on your analysis of this asset
characterisation of your country, evaluate whether investors in this country
have any unique advantages or disadvantages.
Submit your initial response to the Turnitin link provided and post to
the Collaboration forum.
By Wednesday (Day 7), post three to five responses to your
colleagues by:
Comparing a colleague’s asset characterisation analysis to your own
Opening a debate about an analysis with which you disagree
Offering contributions based upon your prior experience
Extending the discussion into new but relevant areas
Modelling or promoting critical reflection from what you have read
Your collaborative participation will be assessed in three segments.
Following the completion of Week 3, you will receive summative feedback and an
initial grade based upon your participation in Weeks 1–3. At the end of the
Week 5, you will receive additional summative feedback and a second grade based
upon your participation in Weeks 4 and 5. At the end of the module, you will
receive further summative feedback and a third grade based upon your
participation in Weeks 6–8. These three assessment points will each form 5% of
your End of Module grade, with a total of 15% for your participation posts
overall.
Please note that you should spread your three to five weekly
collaborative participation responses over a minimum of 3 separate days for
each week. This will help maximise the value of your collaboration with colleagues
and serve to meet the learning objectives for each activity.
Click on the Reply button below to reveal the textbox for
entering your message. Then click on the Submit button to post your
message.
Personal Development Plan
This week you will start writing your Personal Development Plan (PDP).
The purpose and focus of the PDP is to develop a plan for how you will
succeed in achieving your goals for this module and, consequently, for your
program as a whole.
To prepare for this PDP:
Begin by identifying the key insights gained through a review of the
goals and objectives of the module to date, as well as the activities carried
out in the module so far.
Reflect on the emerging themes from the discussions within the
Collaboration area, as well as your Learning Resources and conversations with
others within your group. Consider how the concepts, theory and processes
introduced in this module so far fit in with previous modules you have
completed.
You should identify and briefly summarise two topics discussed in the
Collaborations that have provided new insights regarding investment strategies
and the topics covered so far. Then, develop an outline of the main areas of
your PDP as it relates to your goals for this module as well as for your
program. Having a set of clearly articulated goals and a plan for reaching
them, as well as knowledge of where to turn for help, will allow you to keep
focused on those goals and ensure you have the support necessary to achieve
them.
Are there topics discussed that could have professional or personal
application for you? Consider how the concepts, theories and processes learned
in this module align with previous modules you have completed.
You can develop the outline as you deem appropriate, choosing the areas
in which you wish to develop your expertise. Include areas in which you may
already have expertise. Consider the PDP as an opportunity to also let your
Instructor know about areas you may be having difficulty with.
Your final PDP submission in Week 8 should be approximately 1,500-2,000
words.
To complete this PDP:
By Wednesday (Day 7):
Submit an approximately 250-word response addressing the noted areas and
also laying the groundwork for the Week 8 PDP.
This assignment is not graded, but you will
receive feedback from your Instructor to help you improve your work. Please
take advantage of this opportunity to learn from your Instructor's feedback --
give the assignment your full effort and ask for clarification on any feedback
you do not understand.
PDP forward thinking (Week 8)
As you start to think about your PDP this week, you may find it helpful
to consider what you are working towards for Week 8. With this in mind, the
Final Submission requirements are posted for you here:
The final PDP assignment will be a private submission to the Instructor
and will challenge you to demonstrate your ability to reflect on the learning
outcomes of the module as well as the following subject areas:
Your strategic awareness
Questions of ethics
Other disciplines already studied and how they relate to the content and
concepts of this module (link to
previous classes)
Your cultural awareness
Your career/role
You should look back at the entire
module and prepare a paper that synthesises the activities of the class and
your knowledge gained for the whole 8-week period. Do not just rehash the textbook and Weekly Notes.
Please address the following in your response:
How important do you now view investment strategies to be in relation to
strategic decision-making? Has the module changed your opinions in this regard?
Has the module led to greater insight about your workplace and its functioning?
Do you feel that you have improved your key skills (report writing, time
management, excel use etc.) as a result of your experiences with this module?
How did the overall module materials help you in your personal or
professional life? (This question is particularly important.)
What ethical and cultural issues have you considered to be important in
this module, and how have they influenced your views of global business?
How do you feel about your own professional skills in terms of
communicating your ideas both through the asynchronous (My Working Group, plus
the Main Discussion Board) and the synchronous (Virtual Meeting Room) online
platforms?
How do you feel the collaborative learning with peers through both the
My Working Group and Virtual Meeting Room helped you develop your own ideas
around the module topics? What did you like/dislike about the overall module?
Are there ways in which you feel that your educational experience could have
been improved?
What progress has taken place in achieving the goals identified for this
module in your Week 4 PDP?
What challenges did you face, and what insights did you gain from the
Module Project?
As you may know, at the end of your programme, you will be writing a
dissertation based on a research topic you develop. Sometimes students reach
the end of the programme without thinking about a research topic and then have
difficulty finding a topic. The modules in the programme present opportunities
for identifying possible topics that may be of interest for you to research for
your dissertation. The research articles you review and write about also are
sources of ideas. So it is a good idea to start listing possible research
topics, if any, in your PDPs so that you can refer to them and have a selection
to choose from later. It can save you a great deal of time and effort and lead
to a much better research experience if you have developed ideas to follow up
for research. Did you find any ideas in this module that interest you? If so,
please list and provide a brief summary of your topic idea(s). Also be aware
that there will be a specific section in your dissertation based upon your
PDPs.
Week 3 Collaboration
Role of diversification and assets: Part 2
What determines the price of stocks in the open market? The answer
might seem clear at first, but depending on the investment theory you prefer,
that answer might differ more than you think. For example, efficient market
hypothesis (EMH) theories state that stock market prices reflect relevant
information, thus stocks are always tradable at fair values. None are ever
undervalued or inflated. Considering this, for this Collaboration, you will
continue your discussions from last week, which focused on the concept of
return on investment. As you might expect, you will build upon that discussion
by focusing on the noted EMH theories as well as pricing asset theories.
To prepare for this Collaboration:
Review this week’s
Learning Resources with a focus efficient market hypothesis theory.
Review the Week 2
Collaboration as necessary.
Research at least
one recent (and major) financial or economic event of interest to you.
Reflect on the
effects of this event on market prices.
As you'll have seen, you are NOT required to submit an Initial
Collaboration post this week. However, below are some reflections and questions
just to get our discussions going. In your discussion consider and respond to
the following:
Summarising at least
one recent, and major, financial or economic event.
Analysing how
information about this event was incorporated into the market price of the
stock.
Explaining why use
of information occurred, using arguments coming from asset pricing theories and
EMH.
Explaining your
views on your researched financial or economic event. Fully justify all your
assumptions and claims using your own experience, the Learning Resources and
your own research.
Cite your work using the Harvard Liverpool Referencing System.
Please provide your views (with appropriate underlying research) on one or more
of the above topics. You can start responding as soon as you like and to the
above.
A Summative Grade will be awarded in Week 3, based upon your
Participation in Weeks 1, 2 and 3.
Click on the Reply button below to reveal the textbox for
entering your message. Then click on the Submit button to post your
message.
Group Case Study
In your group, collect time series information about the
performance of an internationally traded stock and calculate the rate of return
that has been achieved in recent years. You should calculate annual, quarterly
and monthly rates of return. Try to collect at last 10 years of data.
Your report will be in a submission of 1,000 to 1,500 words, which
must address the following:
Compare the
different measures and explain the average return and the deviations from this
return.
Collect similar data
of the market-wide index (in the same country) and calculate the market beta of
the stock using annual, quarterly and monthly data. Explain your findings
within the context of the CAPM theory.
Fully justify all your assumptions and claims using your own
experience, the Learning Resources and your own research. Cite your work using
the Harvard Liverpool Referencing System
Module Project Week
3
Project proposal
This week, you will submit a project proposal (1,000 words total)
for your Module Project. In this proposal, you will be expected to describe the
scope, aims and objectives of the Module Project, as they relate to your chosen
client and with reference to each proposed chapter of your Module Project
submission.
As you may recall from Week 1, the project for this module is all
about developing investment strategies for a hypothetical client of your
choice. Your project will evaluate various strategies and ultimately present a
report aimed at convincing your client to allow you to invest on his or her
behalf.
In Week 3, you are to submit your first project proposal submission
of around 1,000 words. In this, you must complete the following:
Describe the scope, aims and objectives of the Module Project, as
related to your chosen client and with reference to each proposed chapter of your
Module Project submission.
Demonstrate an understanding of links to the related underlying
academic literature that you will reference in your Module Project.
Describe key steps and milestones for your ongoing and planned
research, plus how you are planning to achieve these by your final Week 7
deadline.
Your proposal must include the Introduction, which will contain the
following:
Identification and description of the person you have chosen to
represent (that person’s profession etc.).
The country where your client will live.
Provide a broad outline of the client. Start with the client’s
resources (income and assets) and think about his or her liabilities. Discuss
the client’s interests and hopes and fears. This may not be part of the final
report, but it will provide the basis for your advice. It may be considered as
the notes that you have taken from your initial interview with your new client.
It should be based on the outline of the client that is provided.
Make a clear list of the client’s financial needs and financial
assets. One way that you could do this would be to present a personal balance
sheet (statement of financial position) for the person you would advise. Then,
identify that person’s assets and his or her liabilities.
Week 4 Collaboration
Premia in stock markets
Empirical evidence shows the existence of
small-large and value-growth premia in stock markets, thus an understanding of
these premia in stock markets is a valuable tool for your professional
practices in investment. Why is this valuable? As an example, if there is a
risk that a mature payment will not be paid, investors tend to demand a higher
return. In other words, if there is a high risk of default or a credit event,
this will require additional return as compensation. With all this in mind, for
this Collaboration you will investigate premia in your own country and discuss
the associated risks and returns.
To prepare for this Collaboration:
Review your Learning Resources with a focus
on premia factors.
Research small-large and value-growth
premia in stock markets within your country.
Reflect on how these factors impact
expected returns.
To complete this Collaboration:
By Sunday (Day 4), in a response of
approximately 750–1,000 words, address the following issues/questions:
Summarise the evidence you found regarding
small-large and value-growth premia in stock markets within your country.
Analyse how the fundamental risk factors
drive expected returns.
Based on your analysis, critically evaluate why these premia might exist.
Submit your initial response to the
Turnitin link provided and post to the Collaboration forum.
By Wednesday (Day 7), post three to five
responses to your colleagues by:
Opening a debate about premia in stock
markets with which you disagree
Offering contributions based upon your
prior experience
Extending the discussion into new but
relevant areas
Modelling or promoting critical reflection
from what you have read
Your collaborative participation will be
assessed in three segments. Following the completion of Week 3, you will
receive summative feedback and an initial grade based upon your participation
in Weeks 1–3. At the end of the Week 5, you will receive additional summative
feedback and a second grade based upon your participation in Weeks 4 and 5. At
the end of the module, you will receive further summative feedback and a third
grade based upon your participation in Weeks 6–8. These three assessment points
will each form 5% of your End of Module grade, with a total of 15% for your
participation posts overall.
Please note that you should spread your
three to five weekly collaborative participation responses over a minimum of 3
separate days for each week. This will help maximise the value of your
collaboration with colleagues and serve to meet the learning objectives for
each activity.
Click on the Reply button below to reveal the textbox for entering your
message. Then click on the Submit
button to post your message.
Week 4 Personal Development Plan
This week, the PDP assignment that started
in Week 2 is to be continued. As was done in Week 2, you will reflect upon the
key insights you have gained through a review of the goals and objectives of
this module to date. Moreover, you must identify the activities carried out in
the module so far and reflect on the emerging themes from the Collaborations
within the collaboration area as well as your Learning Resources and
conversations with your colleagues. Additionally, consider how the concepts,
theory and processes learned in this module fit in with previous modules you
have completed, as well as their impact on your personal and professional
goals.
To prepare for this Assignment:
Reflect upon your learning thus far in this
module.
Review your Learning Resources and learning
activities from the last 4 weeks as necessary.
Consider how the concepts, theory and
processes you have learned in this module align with previous modules you have
completed.
Identify your personal and professional
goals for this module and programme.
Reflect on how your learning has impacted
those goals thus far.
To complete this Assignment:
By Wednesday (Day 7), submit an
approximately 750-word critical reflection addressing the following:
Develop an outline of the main areas of your PDP as it relates to your
goals for this module as well as for your programme.
Explain your goals and your plan for reaching them.
This assignment should be prepared and
submitted to Turnitin using the Word (.doc or .docx) format no later than
midnight your local time.
Week 5
Collaboration: Yield curve and interest rates
Review this week’s Learning Resources with a focus on yield curve.
Research yield curve information for a country of your choosing. Reflect on how
this yield curve may impact interest rates.
Until Wednesday (Day
7): Continue to participate by engaging in a discussion with your
colleagues, replying to each other’s posts:
In this Collaboration you reflect on theories as they apply to bond
markets across the globe.
As an investor, one way of evaluating a bond would be to look at
what the current price implies for the yield to maturity as well as considering
whether that offers sufficient return for the amount of risk that is being
taken. Recall that the yield curve provides an overview of the yield to
maturity for a range of bonds with different maturities. That said, there are a
number of different theories about what determines the slope or shape of the
yield curve (i.e. expectations theory, liquidity preference theory and
segmented market theory).
As you complete this week’s Collaboration, reflect on these
different theories as they apply to different bond markets across the globe.
To prepare for this Collaboration:
To complete this Collaboration:
In Week 5, you are not required to submit an Initial Collaboration
post. You will, however, find that your Instructor has posted some initial
questions in the Discussion Board Week 3 Collaboration Thread to help stimulate
your subsequent debates.
You should aim to participate with follow-on postings to your
colleagues’ responses, making 3–5 significant follow-up postings. Aim to spread
your total collaboration discussions across 3 separate days of each week.
A Summative Grade will be awarded in
Week 5, based upon your Participation in Weeks 4 and 5.
Click on the Reply button below to reveal the textbox for entering
your message. Then click on the Submit button to post your message.
Week 5 Collaboration
Group Case Study
This week, you work on your second Collaboration Group Case Study
in the My Working Group Folder to which you have been assigned.
Yield curve and interest rates play a pivotal role in evaluating
investments such as bonds.
Focusing on these topics, for this week’s Group Case Study, reflect
on the different theories associated with yield curve, interest rates and
growth as they apply to different bond markets across the globe.
By Wednesday (Day
7):
Keeping this in mind, your team will select a country and research
its bond market.
Based on this research, and in a submission of 1,000–1,500 words, address the following:
Identify the major players (buyers and sellers) within your
country’s bond market.
Describe the yield curve in your country and explain what it says
about the current outlook for interest rates.
Analyse how yield curve in your country compares to your own
expectations about how interest rates and economic growth will evolve in the
future.
Explain whether there is a difference between the market and your
view and how you could profitably take advantage of it.
Fully justify all your assumptions and claims using your own
experience, the Learning Resources and your own research. Cite your work using
the Harvard Liverpool Referencing System.
Please submit your case study to the Turnitin link.
Additionally, submit your audit report, and any Excel spreadsheets
you decide to use as part of your submission, to the Team Audit Report link.
When submitting your assignment, be sure to clearly specify the
responsibilities of each team member in your audit report. Only one submission
is required per group.
To access the Group Forum to which you have been assigned, click on
the "Week 5 Group Forum" link.
To submit your case study to Turnitin, click on the
"View/Complete" link for Week 5 Collaboration Group Case
Study--Turnitin.
To submit your brief Team Audit Report, click on the "Week 5
Team Audit Report" link, and attach any other supporting Excel attachments
you decide to use in your submission
Week 5 Module
Project: Steps 3-4
You continue working on your Module Project in which you are
developing investment strategies for a hypothetical client of your choosing.
Keep in mind that during this project, you must evaluate various
investment strategies and ultimately present a report aimed at convincing a
client to allow you to invest on his or her behalf.
For this next deliverable, you will submit the third and fourth
steps highlighted in the overall Module Project outline presented in Week 1.
To complete this
Module Project:
By Wednesday (Day
7):
For this submission, complete the following:
Step 3: Carry out
the asset allocation (3-6 A4 pages)
Outline the asset allocation of the portfolio that you will
recommend. What percentage of cash, bonds and stock will you recommend the
client hold? What sort of risk and return do you anticipate? How do you make
these assessments? What is the level of risk that you suggest the client take?
Remember to provide support for what you advise. Make sure that you relate this
asset allocation to the risk assessment that you have assumed in Step 2.
Consider the issue of liquidity. How much cash is required at each moment?
What are the risks involved in holding more illiquid assets? Are these risks
justified? This asset allocation should include a consideration of alternative
assets and foreign securities. What does the inclusion of these alternatives do
to risk and return? You may support your asset allocation decision with
reference to a view of the economy. You may also highlight potential changes in
future economic conditions that would warrant a change in asset allocation.
Do not, at this stage, move from asset allocation to securities
selection. You may recommend that 30% of the fund be invested in equities, but
you should leave until later the specific equities that will be chosen.
Step 4: Choose an
investment strategy and benchmarks (3-6 A4 pages)
Decide whether the investment strategy will be more passive or more
active in nature. Why have you made this choice? What are the costs and
benefits of the alternative strategies? How does this relate to the risk that
the client is prepared to take? How frequently will you assess the performance
of the portfolio? What will make you consider changing the composition of the
portfolio? What are the conditions or circumstances that will make you advise
taking some action? Choose benchmarks to analyse the relative performance of
the assets and securities that you have chosen. Outline the characteristics of
a useful benchmark. Explain why you have chosen these benchmarks over
alternatives.
Target length:2,000
words
This assignment is not graded, but you will receive feedback from
your Instructor to help you improve your work. Please take advantage of this
opportunity to learn from your Instructor's
feedback -- give the assignment your full effort and ask for
clarification on any feedback you do not understand.
To submit your Module Project to Turnitin, click on the
"View/Complete" link for Week 5 Module Project -- FF - Turnitin.
Week 6 Collaboration
Collaboration:
Business valuation: Part 1
Review this week’s Learning Resources with a focus on business
valuation. Reflect on the perspective of a company manager intending to conduct
a hostile takeover of another company. Identify potential methods of valuating
the merger target. Consider the strengths and weaknesses of your identified
methods.
For this Collaboration, you will further explore concepts of
business valuation as you valuate a merger acquisition
Recall that most investors will evaluate investment or business
opportunities by comparing the cost and risk of an acquisition versus the
expected future return. For example, recall the life cycle of firms and their
dividend policies. Young firms usually have much greater growth potential than
larger, more-established companies. However, due to a lack of reputation or
tangible assets, it is likely to be more difficult or expensive for these newly
established companies to borrow. In this case, there would be a tendency to pay
few or no dividends. Conversely, larger firms are more likely to be in a
business that is more mature. They may find it easier to borrow if necessary,
and therefore they would tend to return more of their earnings to shareholders.
Bearing these examples in mind, for this Collaboration, you will
further explore these concepts of business valuation as you valuate a merger
acquisition. You will do so under the guise of a manager of a company that
intends to conduct a hostile takeover.
To complete this
Collaboration:
For your Initial Response, in approximately
750–1,000 words, address the following issues/questions:
As the manager of a company that intends to conduct a hostile
takeover, outline your strategy on how you would evaluate a merger target.
Explain the key variables you would need to address in executing
your strategy.
Critically analyse the main strengths and weaknesses of your chosen
methodology and justify the reasoning for your choice.
Submit your Initial Response to Turnitin and to the Collaboration
forum.
Until Wednesday (Day
7):
Offering contributions based upon your prior experience
Extending the discussion into new but relevant areas
Modelling or promoting critical reflection from what you have read
Participate by engaging in a discussion with your colleagues,
replying to each other’s posts by:
You should aim to participate with follow-on postings to your
colleagues’ responses, making 3–5 significant follow-up postings. Aim to spread
your total collaboration discussions across 3 separate days of each week.
Your collaborative participation will be assessed in three
segments. Following the completion of Week 3, you will receive summative
feedback and an initial grade based upon your participation in Weeks 1–3. At
the end of the Week 5, you will receive additional summative feedback and a
second grade based upon your participation in Weeks 4 and 5. At the end of the
module, you will receive further summative feedback and a third grade based
upon your participation in Weeks 6–8. These three assessment points will each
form 5% of your End of Module grade, with a total of 15% for your participation
posts overall.
Click on the Reply button below to reveal the textbox for entering
your message. Then click on the Submit button to post your message.
Personal Development
Plan
This week you will create a further submission of a reflective
statement relating to your module work to date.
This activity is designed to help you reflect in more depth on your
personal development and should feed in to your (graded) Final PDP submission
for Week 8.
To complete this
PDP:
Post a draft version of your PDP submission to your My Working
Group, to obtain feedback and suggestions from your team members. You should do
this as soon as possible after the start of Week 6. Note, you should use the
main My Working Group forum and the pre-prepared PDP Formative
Assessment Discussion Week 6 thread.
By Wednesday (Day
7):
Submit an approximately
1,000-word post describing areas of your ongoing personal development
related to this module.
Build upon the material from your Week 4 reflective paper. Please
reflect upon the questions and feedback from your Week 4 PDP. You may wish to
reflect upon the following:
Discuss those areas of investment strategies that have most
resonated with you so far.
How do you see the concepts that you have studied applying to your
professional experience, as well as your personal finances?
What steps might you now take to aid you in the transition of
applying the coursework to your workplace?
Submit your post to the Turnitin link provided.
Week 7 Collaboration
Collaboration:
Business valuation: Part 2
Review this week’s Learning Resources with a focus on derivative
valuation. Review the Week 6 Collaboration as necessary. Reflect on the given
statement from Warren Buffet and review the given Reference. Identify benefits
and risks associated with the use of derivatives. Reflect on scenarios where
derivatives are useful or damaging to merger acquisitions.
Until Wednesday (Day
7):
Continue to participate by engaging in a discussion with your
colleagues replying to each
“Derivatives are time bombs, both for the parties that deal in them
and the economic system. Basically these instruments call for money to change
hands at some future date, with the amount to be determined by one or more
reference items, such as interest rates, stock prices, or currency values. For
example, if you are either long or short an S&P 500 futures contract, you
are a party to a very simple derivatives transaction, with your gain or loss
derived from movements in the index. Derivatives contracts are of varying
duration, running sometimes to 20 or more years, and their value is often tied
to several variables.” —Warren Buffet (2002)
Take a moment to consider this statement from Buffet. In the past,
the investor has oft referred to derivatives as ‘weapons of financial mass
destruction’. However, despite their inherent risk, derivatives do have their
benefits and can be helpful in merger acquisitions.
As such, this week’s Collaboration will continue the discussions on
valuating a merger acquisition as you consider this week’s topic of derivative
valuation.
Reference: Buffet, W. (2002) Berkshire Hathaway annual report
[Online]. Available from:
http://www.fintools.com/docs/Warren%20Buffet%20on%20Derivatives.pdf (Accessed:
11 March 2015).
To complete this
Collaboration:
In Week 7, you are not
required to submit an Initial Collaboration post. You will, however, find that
your Instructor has posted some initial questions in the Discussion Board Week
7 Collaboration Thread to help stimulate your subsequent debates.
Week 7 Module
Project: Final submission
In the previous submissions of your Module Project, you broke down
the details of your prospective client, focusing especially on his or her
resources, liabilities, location, and interests. Based on this information, you
created benchmarks and devised a viable investment strategy for the client. You
also developed a clear list of the client’s financial needs and assets.
Using this information, this week, you will develop a full
investment strategy for your client. To do so, you will evaluate various
strategies and ultimately present a report aimed at convincing a client to
allow you to invest on his or her behalf.
To complete this
Module Project:
By Wednesday (Day
7):
This week, you submit your completed Module Project which should be
around 5,000 words.
You will finalise Steps 1-4 and also complete the following two
milestones (Steps 5–6) of the Module Project:
Steps 1-4
From Week 3 and Week 5 submissions, final version with Instructor
feedback incorporated.
Step 5: Pick
specific securities (three to six A4 pages)
Select the specific securities (bonds, equities or other) that you
will recommend the client purchase with his or her funds.
Can you purchase specific bonds that mature at the time that funds
are required? Explain to the client what this does to the risk of the
portfolio.
Outline the criteria that you have used to select the securities.
This should include an assessment of things such as the P/E ratio, the shape of
the yield curve and current price of risk in the markets.
The securities selection should be consistent with the asset
allocation decided in Step 3. Any changes in the asset allocation that have
been considered should lead to some change in the composition of the securities
held. If you have outlined some potential for changes in the asset allocation,
You may want to also recommend changes in specific securities that
would accompany these adjustments. You may want to look at funds. Which funds
will you choose? How will you make the selection? What are the costs that you
will have to pay to invest in these funds? What are the costs and benefits of
using funds rather than your own judgment?
Step 6: Finalise
your document and write an executive summary (around 5,000 words overall; 20–30
A4 pages for the main body of the report)
Make amendments to the overall document. Now is the time to
finalise the selection of particular bonds and equities for the portfolio.
Try to ensure that all the components are consistent.
The format should be professional, both in prose and in visual
format.
When you refer to an article or book, use the Harvard Liverpool
Referencing System. Please remember to include apposite citations from
peer-reviewed journal articles (from our online library).
Extract your most important elements for your executive summary and
remember to include an Index and end References list.
Investment Strategies Week 8 Assessments
Week 8 Collaboration: Home Bias Puzzle
The home bias
puzzle, a widely discussed problem in international finance, is the focus for
this week’s Collaboration.
Generally speaking,
the home bias puzzle is the term given to describe the fact that individuals
and institutions hold modest amounts of foreign equity in comparison to
domestic investments. Unfortunately, the preference for investing close to home
creates financial diversity inefficiency for investors. At the same time,
however, this arguably allows investors to better tend their investments
through the advantage of proximity. In this Collaboration, you will consider
points such as these as you analyse the prospects of the home bias puzzle and
evaluate some of the primary theories put forth to explain it.
To complete this Collaboration:
By Sunday (Day 4):
For your Initial Response, in a response of approximately 750–1,000
words, address the following issues:
Explain why the home bias is puzzling to investment theorists.
Evaluate the validity of the main theories suggested by economists
that could explain the puzzle. Justify your reasoning.
Fully justify all your assumptions and claims using your own
experience, the Learning Resources and your own research.
Cite your work using
the Harvard Liverpool Referencing System. Submit your Initial Response to
Turnitin and to the Collaboration forum.
Week 8 Personal Development Plan: Final submission
Throughout the last
8 weeks, your learning in this module has no doubt influenced your perspective
on your personal and professional goals, as well as your strategies for
reaching those goals. In light of this, you will revisit all of your previous
submissions for your PDP, as well as all associated Instructor feedback, and
leverage these to finalise your last PDP submission.
The final PDP
assignment will be a private submission to the Instructor and will challenge
you to demonstrate your ability to reflect on the learning outcomes of the
module as well as the following subject areas
Your strategic
awareness
Questions of ethics
Other disciplines already studied and how they relate to the
content and concepts of this module (link to previous classes)
Your cultural awareness Your career/role
You should look back
at the entire module and
prepare a paper that synthesises the activities of the class and your knowledge
gained for the whole 8-week period. Do not just rehash the textbook
and Weekly Notes.
Your PDP should be approximately 1,500-2,000 words.
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