Description These stocks' price movements tend to follow the business cycle. This refers to stocks of companies that have a total market value of more than $10 billion. These stocks' price movements tend to remain stable, even during periods of contraction in the business cycle. This refers to stocks of companies that have a total market value of less than $2 billion. These are of the highest quality and have a long and stable record of earnings and dividends O False O True Term O False Cyclical stocks O True Large-cap stocks True or False: One way of protecting against the kind of stock-value losses suffered by most stocks during the 2009 recession is by investing in cyclical stocks. Small-cap stocks True or False; The major difference between small-cap, mid-cap, and large-cap stocks is the size of the stock's market cap. 27

Assignment Chapter 11 Investment Planning The motivetion for making investments is largely driven by the goals you have. These goals could be short-term such as buring a new caf, saving for a down payment on a home or saving enough to take a year off and travel. In any situation, the first step is to identifying the smount of capital you need and how much risk are you willing to take for the return you expect. Andrew is a 25 -year-old dental hyglenist whose primary long-term financial goal is to save enough to take a year off and trovel. Therefore, he wants to begin an investment plan that will make this a reality within 5 years. Ho currently has $3,000 saved for this purpose, and he wants to determine the appropriate monthly savings amount that will allow him to reach his goal. He esumates that he can earn an average annual return of 5%, and he would like to save a total of $25,000 to cover his expenses for the year. If he invests the $3,000 today, the terminal value of this initial investment in 5 years (earning an average 5% return) will be This means that he must accumulate the remaining through his annual savings plan to obtain the full $25,000 to cover his expenses for the year. Still assuming an average return on investment of 5\%, the additional yearly investment required to reach Andrew's targeted financial goal within 5 years is Suppose instead that Andrew hod no capital saved and thus needod to accumulate the entire $25,000 in the next 5 years. In this case, his annual contribution would hove to be When Andrew starts with on initial investment of $3,000, the total amount that he ends up contributing to accurnulate $25,000 is equal to the initial investment plus the additional yearly payments, for a total of When he starts with no initial capital contribution, the amount he ends up contributing is equal to the sum of all annual contributions you calculated in the no-initial-capital scenario, for a total of Once Andrew has determined the annual amount he needs to save, the next step toward achieving his goal is coming up with an investment plan. True or false: The appropriate investment plan depends only on the total amount of money he intends to save, not on the investment objective. True. failes