FINA 3210 Investments and Portfolio Analysis

FINA 3210 Investments and Portfolio
Analysis
(Online – 10 Week Accelerated
Course)
Discussion Board Activity [Week 5]
“To begin your posting:
• Click on this week’s Discussion Board link in the DBs for this forum
• Click Create Thread in the upper left of the forum”
TERM PROJECT Part II (3.00 points)
Overall Objective: To familiarize students with information
gathering and identification of Investable Funds (Part II –
Initial Wealth).
Part II.1A (1.50 Points)
1. What do you think would be your ‘initial wealth’? Briefly explain.
2. Let us do a reality check: Go through your attic/ basement/
closet(s) [and/ or your parents’ or relatives’ – with their permission
of course] and, make a list of some of items that you could use to
create your initial wealth.
3. To further help you get some ideas, look at the following article.
You have to go through 2 steps:
a. Go to “https://www.yahoo.com/makers/”
b. Enter
“14thingsinyourparentsbasementworthserious121931483013” in
to the Search box.
c. Of the above 14 listed items, which did you find in your attic/
basement/ closet(s) [and/ or your parents’ or relatives’ – with
their permission of course]?
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4. Make a prioritized list of the items that you would be willing to sell
to create your initial wealth.
5. Explain in detail, one (1) item that is the most likely to be helpful in
creating your ‘Initial Wealth.’ Include in the discussions, your “gut’
or ‘intuitive’ estimate of the $ amount involved.
6. For this selected item, using the ‘Wall Street Journal (WSJ)’, look
for 1 article which would support your estimates or cause you to
modify them into a more realistic assessment. Discuss the relevant
article briefly. How would you revise your “gut” estimates based on
the article?
7. For this selected item, using any other source, look for information
which would support your estimates or cause you to modify them
into a more realistic assessment. Discuss the relevant information
briefly. How would you revise your “gut” estimates based on the
information?
8. Apart from these 2 sources (and excluding ‘E-bay” and “Craig’s
List”), what other sources can you find to give you an idea of the
current value of the item? How would you revise your “gut”
estimates based on the information?
9. Use ‘E-bay” and “Craig’s List” to provide you with the desired
information? How would you revise your “gut” estimates based on
the information?
10.Which sources provide you with a ‘price history’ too?
11.Would this one item be enough to create your desired initial wealth
(using the above research – without any actual ‘number
crunching’)?
12.What portion of the initial wealth from this 1 item would you apply
to your #1 priority goal? Why? How much is that in $s?
Part II.1B (1.5 Points)
1. Are you happy/ surprised at the results?
2. Based on your ‘#1 goal,’ would this part of the initial wealth
(investable amount) be adequate – using ‘gut feelings – to achieve
that goal? What if you were to combine more than 1 item? Which
items? How would your numbers change?
3. Now review the above and after adjusting the ‘gut’ estimates –
based upon your revised thoughts on how much you can afford to
put towards the new investment. Make sure you explain in detail.
4. What $ amount would be available now to put towards achieving
your ‘#1 goal’?
5. Based on your ‘#1 goal,’ would this revised $ investable amount be
adequate to achieve that goal if you used the historical average
return of the average common stock (9%)? How much would the
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initial wealth grow to over the time horizon for your #1 goal?
Compare to the target $s needed. Show your calculations following
the examples in the Lecture Notes. What is your reaction?
6. Based on your ‘#1 goal,’ would this revised $ investable amount be
adequate to achieve that goal if you used the historical average
return of the risk-free asset (3%)? How much would the initial
wealth grow to in the time horizon for your #1 goal? Compare to
the target $s needed. Show your calculations following the
examples in the Lecture Notes. What is your reaction?
7. Based on your ‘#1 goal’ target $s needed required to achieve that
goal, and, if you used the historical average return of the average
common stock (9%), how much initial wealth is needed in the time
horizon for your #1 goal? Compare to the revised $ investable
amount from selling your item(s). Show your calculations following
the examples in the Lecture Notes. What is your reaction?
8. Based on your ‘#1 goal’ target $s needed required to achieve that
goal, and, the revised $ investable amount from selling your
item(s), what return do you need to match them in the time
horizon for your #1 goal? Show your calculations following the
examples in the Lecture Notes. What is your reaction?
9. Based on your ‘#1 goal’ target $s needed required to achieve that
goal, and, the revised $ investable amount from selling your
item(s), what time horizon would you need for achieving your #1
goal? Assume that you can use the historical average return of the
average common stock (9%). Show your calculations following the
examples in the Lecture Notes. What is your reaction?
10.Are you still happy/ surprised at the results?
General Guidelines:
1. Please remember that this is a public forum so please share only
what you feel comfortable sharing.
2. Please post your responses on the discussion board directly (NOT
as an attachment).
3. Participants must create a thread and post their response in
order to view other threads in this forum. Please post Part A and
Part B as separate posts but using the same thread.
4. Posting as an attachment will lead to a partial loss of points!
5. The attachments are restricted to supporting copies of
articles, supporting data and tables etc. as applicable.
6. You will lose points if you do not address each and every point
given in the guidelines above!
7. Expanded answers sharing your experiences, specially
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‘investing,’ are encouraged! Go by the ‘spirit’ and not just the
‘letter’ of the guidelines!!
8. Writing beyond ‘the call of duty’ is appreciated and could be
rewarded with ‘bonus points’ at the instructor’s discretion!!!
Due dates
Your posts to week 3’s DB activity must be done by Sunday 11.59 PM
ET (USA) of week 5 viz. 6/21. If you do not post your response on
time, you will earn a zero as your DB credit for the week. It is possible
to earn partial credit based on the parts submitted on time.
Points
This is a graded assignment worth up to 3.00 points overall.
A rough guideline to earning every 0.5 points is to write “Your
answers” using a minimum of 3/4 page to 1 page or more (excluding
the ‘cut and paste’ of the guidelines). You can use Word, Verdana, 12
pt. or use Word, Times New Roman, 12 pt.
Format Guidelines: Please follow the example given below (you can ‘cut
and paste’ the questions from the instructions and use ‘italics’ for your
response) –
EXAMPLE:
Term Project Part II
Part II.1A
1. What do you think would be your ‘initial wealth’? Briefly explain.
Your answer here.
2. Let us do a reality check: Go through your attic/ basement/
closet(s) [and/ or your parents’ or relatives’ – with their
permission of course] and, make a list of some of items that you
could use to create your initial wealth.
Your answer here.
And so on
Part II.1B
1. Are you happy/ surprised at the results?
Your answer here.
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2. Based on your ‘#1 goal,’ would this part of the initial wealth
(investable amount) be adequate – using ‘gut feelings – to
achieve that goal – if you were to combine more than 1 item?
Which items?
Your answer here.
And so on