Business Finance Assignment
Assignment ID Number AFFGEHU83939HD Type of Document Essay Writing Format APA/MLA/Harvard Academic Level Masters/University References/Sources 4 References
Business Finance Assignment (BCO212)
Business Finance Assignment (BCO212)
All of the questions and issues below will be answered by the student.
A document in Excel format should be submitted.
Arial 11 pts font.
Justified text alignment.
Week 5 submission via Moodle (Turnitin). Sunday, June 27th, 23:59 CEST
This task accounts for 40% of your overall grade in this subject.
The following learning outcomes are assessed in this task:
Understand the fundamental theories of finance and how to apply them to real-world situations.
Describe the relationship between risk and return and use risk and return measurement methods and strategies.
Analyze a series of future cash flows and make investment recommendations.
QUESTIONS FOR THE ASSIGNMENT:
IMPORTANT: FOR EACH QUESTION, SHOW YOUR DETAILED SOLUTIONS.
Obstacles (60 points)
1.-You need a 100,000 loan from your local bank to purchase a new Porsche. You can afford 1,800 in monthly payments, but no more. What is the greatest APR you can pay on a 60-month loan, assuming monthly compounding?
2.- A large investment bank has offered David Alonso a position as a local manager. He will be paid a basic salary of 255,000. One year after starting work, he will receive his first yearly salary payout. He will also receive an immediate bonus of 25,500 for joining the company. His annual pay will increase by 4% per year. Every year, David believes he will receive a bonus equal to 25% of his annual pay.
If David is 40 years old today and expects to work for the company for the next ten years, what is the present value of this employment offer if the discount rate is 11%?
3.- You want to build a portfolio that is as risky as the market, and you have the resources to do it.
500,000 is available for investment. Fill in the blanks in the following table with this information: The total investment is $500.000.
4.- A stock has a 15 percent projected return, a beta of 1.2, and a market expected return of 12 percent. What is the risk-free rate required to be?
What is the portfolio’s projected return?
What is the portfolio’s variance?
What is the standard deviation of a data set?
Inquiries (40 points)
a) How does increasing the rate r affect the future value of an annuity? So, what happens to the current price?
b) Who is the owner of a corporation? Describe the procedure by which the firm’s management is controlled by the owners. What is the primary rationale for the existence of an agency relationship in a corporate structure? What kinds of issues might occur in this situation?
Business Finance Assignment (BCO212)
c) Is the statement below truthful or false? Because no risk-averse investor would be prepared to retain this asset in equilibrium, a risky security cannot have an expected return that is less than the risk-free rate. Explain.
d) Is it conceivable for a risky asset’s beta to be zero? Explain. What is the projected return on such an asset based on the CAPM? Is it conceivable to have a negative beta on a risky asset? What is the CAPM’s prediction for the asset’s projected return? Is it possible for you to explain your response?
e) Why is some risk diversifiable, in general? Why can’t some risks be diversified? Does this mean that an investor can only control the amount of unsystematic risk in a portfolio but not the amount of systematic risk?
The student exhibits a thorough grasp of the ideas.
The student shows that he or she understands the principles.
The student shows that he or she has a good grasp of the ideas.
The pupil shows some comprehension of the topics, but it is insufficient.
The learner exhibits a lack of comprehension of the principles. They may name some pertinent ideas or concepts, but it is evident that the student does not understand the relationship between them.
The student shows a lack of grasp of the concepts by failing to provide any pertinent thoughts or concepts.
The student either does not answer the question or cheats.
Business Finance Assignment (BCO212)
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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