File Tools View BC0224 Financial Markets Final Assignment_BCN11826 - Word O 0 X April 1.70% 4.8% 8.2% BCO224 FINANCIAL MARKETS Task brief & rubrics May 1.75% 5.0% 8.2% Task: (60% of the Final grade) You must answer all the questions. c) Find the US Yield curve, show it graphically and explain if the economy is head- ing for a boom or for a recession? Explain your choice. This task assesses the following learning outcomes: 2.- (20 points) Consider the following information on the stock market. Interest rates, term structure and expectation hypothesis. Stock, stock markets, mutual funds Foreign exchange rates and its effect on business Submission file format: Word document with all the answers, clearly identifying all steps, results, including comments besides each answer. Company Shares Outstanding Price beginning of year of year A 200 500 1000 $58 $20 $70 $94 $25 $6 1.- (30 points) a. Compute a price-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? Explain what the yield curve and the expectations hypothesis is. a) Suppose that the interest rate on one-year bonds is currently 2 percent and is expected to be 3 percent in one year and 4 percent in two years. Using the expec- tations hypothesis, compute the yield curve for the next three years and show it graphically. b. Compute a value-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? b) Given the data in the accompanying table, would you say that this economy is heading for a boom or for a recession? Explain your choice. 3-month Treasury 10-year Treasury Baa corporate band 10-year band 3.5% 7.5% 3.-(15 points) Imagine that you here that the expectation for the next year is that the U.S. dollar is going to strengthen against the Euro over the next five to ten years. You believe in the theory of purchasing power parity, having this in mind explain whether you expect inflation in the United States to be higher or January 1.5% 4.0% February 1.55% March 1.60% 7.7% 8.0% Screens 1-2 of 4 140% File Tools View BC0224 Financial Markets Final Assignment_BCN11826 - Word o Rubrics lower on average compared with that in the Euro zone over the abovemen- tioned period. 9-10 8-8.9 7-7.9 6-6.9 3.59 4.- (35 points) Follow a public traded stock and analyze the changes in stock price. Write a presentation and an executive memo of your findings. Choose one of the following companies: 1) Amazon 2) Alphabet 3) Microsoft 4) Facebook 5) Apple Descriptor The student demonstrates an excellent understanding of the concepts. The student demonstrates a good understanding of the concepts. The student demonstrates a fair understanding of the concepts. The student demonstrates some, but insufficient understanding of the concepts The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understaad by the student The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts. The student leaves the question blank or cheat 1-2.9 95% of the grade based on the approach, calculations and comments, and 5% based on the presentation and look & field of the spreadsheet. In your presentation you should: Points are at the end of each question. End of document I 1) Describe graphically the trend of the stock prices during the last 2 months and, in more detail, during the last 3 weeks. 2) Explain the observed trends 3) Compare the trends with relevant indexes 4) Relate these trends to relevant contextual information (example: Covid cri- sis). 5) Is the development of the prices positive? Do you consider that an invest- ment done two months ago is good? Explain. 6) Regarding this context, briefly forecast the changes in prices for the next month. Screens 3-4 of 4 E 140% File Tools View BC0224 Financial Markets Final Assignment_BCN11826 - Word O 0 X April 1.70% 4.8% 8.2% BCO224 FINANCIAL MARKETS Task brief & rubrics May 1.75% 5.0% 8.2% Task: (60% of the Final grade) You must answer all the questions. c) Find the US Yield curve, show it graphically and explain if the economy is head- ing for a boom or for a recession? Explain your choice. This task assesses the following learning outcomes: 2.- (20 points) Consider the following information on the stock market. Interest rates, term structure and expectation hypothesis. Stock, stock markets, mutual funds Foreign exchange rates and its effect on business Submission file format: Word document with all the answers, clearly identifying all steps, results, including comments besides each answer. Company Shares Outstanding Price beginning of year of year A 200 500 1000 $58 $20 $70 $94 $25 $6 1.- (30 points) a. Compute a price-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? Explain what the yield curve and the expectations hypothesis is. a) Suppose that the interest rate on one-year bonds is currently 2 percent and is expected to be 3 percent in one year and 4 percent in two years. Using the expec- tations hypothesis, compute the yield curve for the next three years and show it graphically. b. Compute a value-weighted stock price index for the beginning of the year and the end of the year. What is the percentage change? b) Given the data in the accompanying table, would you say that this economy is heading for a boom or for a recession? Explain your choice. 3-month Treasury 10-year Treasury Baa corporate band 10-year band 3.5% 7.5% 3.-(15 points) Imagine that you here that the expectation for the next year is that the U.S. dollar is going to strengthen against the Euro over the next five to ten years. You believe in the theory of purchasing power parity, having this in mind explain whether you expect inflation in the United States to be higher or January 1.5% 4.0% February 1.55% March 1.60% 7.7% 8.0% Screens 1-2 of 4 140% File Tools View BC0224 Financial Markets Final Assignment_BCN11826 - Word o Rubrics lower on average compared with that in the Euro zone over the abovemen- tioned period. 9-10 8-8.9 7-7.9 6-6.9 3.59 4.- (35 points) Follow a public traded stock and analyze the changes in stock price. Write a presentation and an executive memo of your findings. Choose one of the following companies: 1) Amazon 2) Alphabet 3) Microsoft 4) Facebook 5) Apple Descriptor The student demonstrates an excellent understanding of the concepts. The student demonstrates a good understanding of the concepts. The student demonstrates a fair understanding of the concepts. The student demonstrates some, but insufficient understanding of the concepts The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understaad by the student The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts. The student leaves the question blank or cheat 1-2.9 95% of the grade based on the approach, calculations and comments, and 5% based on the presentation and look & field of the spreadsheet. In your presentation you should: Points are at the end of each question. End of document I 1) Describe graphically the trend of the stock prices during the last 2 months and, in more detail, during the last 3 weeks. 2) Explain the observed trends 3) Compare the trends with relevant indexes 4) Relate these trends to relevant contextual information (example: Covid cri- sis). 5) Is the development of the prices positive? Do you consider that an invest- ment done two months ago is good? Explain. 6) Regarding this context, briefly forecast the changes in prices for the next month. Screens 3-4 of 4 E 140%