I need ALL of this completed that is a word documnet

1 FINA201 - Financial Concepts and Calculations Portfolio Project Directions and Rubric This Assessment is worth 30% of your overall grade Completing this assessment will help you to: Course Outcomes: 1. Describe how time values of money (TVM) calculations are calculated. 2. Summarize the tools and concepts that are used to evaluate financial assets. 3. Calculate the future and present values of individual cash flows, ordinary annuities, annuities due, perpetuities, and investments with uneven cash flows. 4. Analyze how interest rates, maturity dates and payments affect debt that is amortized over time. 5. Recommend investment modifications based upon interest rate changes. Program Outcomes: 1. Analyze and apply contemporary knowledge and skills in the financial services sector. 2. Demonstrate strategic and tactical financial planning abilities. Institutional Outcomes: 1. Information Literacy and Communication - Utilize appropriate current technology and resources to locate and evaluate information needed to accomplish a goal, and then communicate the findings in visual, written and/or oral formats. 2. Relational Learning - Transfer knowledge, skills, and behaviors acquired through formal and informal learning and life experiences to new situations. 3. Thinking Abilities - Employ Strategies for reflection on learning and practice in order to adjust learning processes for continual improvement. 4. Quantitative and Scientific Reasoning - Follow established methods of inquiry and mathematical reasoning to form conclusions and make decisions. Deadline: Deliverable items for the Portfolio Project will be required at different points during our course. The timeline is as follows: Assignment Due Date By the end of Week 3 at 11:59 pm, ET. By the end of Week 4 at 11:59 pm, ET. By the end of Week 5 at 11:59 pm, ET. By the end of Week 6 at 11:59 pm, ET. By the end of Week 7 at 11:59 pm, ET. By the end of Week 7.5 at 11:59 pm, ET. Assignment for Submission Part 1 - Time Value of Money Part 2 - Quantitative Investment Concepts Part 3 - Measures of Investment Returns Part 4 - Bond and Stock Valuation Concepts and Calculations Part 5 - Depreciation Calculations Portfolio Project Reflection. Upload your entire Portfolio Project to your electronic portfolio. Outcome 1,3,4 2 5 2 2,4 1,2,3,4,5 Part 1 - Time Value of Money: Due by the end of Week 3 at 11:59 pm, ET. Complete each of the following items: 1. Present Value (PV): In ten years you will inherit $100,000 from your grandfather's trust. If interest rates are at 5%, how much is this worth today? 2. Payment (PMT): You have decided to buy an automobile for $10,000 and the finance rate will be 5%, compounded annually, for four years. What is the payment required at the end of each of the four years? 3. Future Value (FV): You will invest $1,000 for five years in an account earning 3% annual interest, compounded semiannually. What will be the value in five years? FINA201 - Portfolio Project Directions 2 4. Present Value of an Annuity (PVA): You expect to receive a payment of $1,000 at the end of the year for the next three years. If interest rates are 5%, what is the annuity worth today? 5. Future Value of an Annuity (FVA): You will invest $2,000 at the beginning of the year for three consecutive years. You anticipate that you will earn 5% annually on your investment. What will be the value of this investment at the end of the three years? 6. Net Present Value (NPV): You are considering an investment that will provide the following results. If the rate of interest is 8%, what is the most that you should pay for this investment? End of Income Year 1 1,000 2 1,000 3 3,000 4 4,000 5 4,000 7. Uneven Cash Flows: You would like to purchase a new car one year from now. Year one payment is $6,000, the second year payment is $6,600, the third is $7,250, and the fourth is $8,100. If you want to have the cash in the bank today to pay for this, assuming an interest rate of 5%, how much should be placed into the account? 8. Amortization: You would like to buy a home valued at $300,000, and plan to make a 10% down payment. The remainder will be financed with a 30 year loan at 3.5%, fixed rate for the term of the loan. Given these terms, what will be the monthly payment for 30 years? 9. Serial Payments: You would like to receive an equivalent of $10,000 in today's dollars at the start of the year for the next five years. Assuming that inflation will average 3% over during that time and you can earn 5% on your investment. How much will you need to invest today in order to receive these five annual payments, adjusted for inflation? Upload your document and submit. Part 2 - Quantitative Investment Concepts: Due by the end of Week 4 at 11:59 pm, ET. Complete each of the following items: 1. Standard Deviation (population/sample): A measurement of risk measuring \"variability\" around a \"mean\" or \"average.\" What are the average, sample standard deviation, and population standard deviation of the following set of returns? -2.0%, 6.5%, 8%, -4%, 10%, 2.8% 2. Standard Deviation (two-asset portfolio) What is the standard deviation of a portfolio consisting of the two assets? i = 12% of the portfolio with standard deviation of 8% j = 81% of the portfolio with a standard deviation of 11% Refer to the following data for questions 3 and 4: Returns: Probability A B .1 10 6 C 14 D 2 FINA201 - Portfolio Project Directions .2 .4 .2 .1 10 10 10 10 8 10 12 14 12 10 8 6 3 6 9 15 20 3. Covariance: Measures the strength of the relationship between two securities. The covariance of two assets is calculated by multiplying the product of the differences divided by the number of observations -1. What is the covariance between the stocks A and B? 4. Correlation coefficient: Measures strength of relationship between two securities and has boundaries of -1.0 to +1.0. Know by the symbol \"R\". What is the correlation coefficient of stocks A and B? R = Covariance of AB (STD Dev A) X (STD Dev B) 5. Coefficient of determination (R2): This is the square of the correlation coefficient and used to show the percentage change of an individual security that can be attributed to the market index against which the R2 is measured. What is the coefficient of determination for the result in question 4? 6. Coefficient of variation: Compares the relative variation of two or more securities.CV = Standard Deviation / The Average Asset A has an average return of 5.87 and a standard deviation of 7.19 Asset B has an average return of 6.87 and a standard deviation of 7.59 Which of these two assets has greater variability? 7. Beta: Measures the volatility of stock or portfolio relative to an index, and measures only systematic risk. The standard deviation for a stock is 15%, and the standard deviation for the market is 10%. The correlation coefficient for the stock and the market is .6. What is the stock's beta ( = (correlation coefficient X STD Dev Stock) /Std Dev Market)? Upload your document and submit. Part 3 - Measurement of Investment Returns: Due by the end of Week 5 at 11:59 pm, ET. Complete each of the following items: 1. Simple vs. Compound Return: If $200 is in a savings account and receives 3% simple interest per year, how much is in the account at the end of five years? If interest is compounded, how much is in the account at the end of the five years? 2. Geometric average vs. arithmetic average return What is the arithmetic mean of 6% and -4%? What is the geometric mean of 15%, -5% and 5%? 3. Time weighted vs. dollar weighted return: An investor deposits $10,000 at the beginning of Year 1. One year later, the investment has earned a total return of 20%, or $2000. An additional $50,000 is added at the beginning of Year 2 and earns 6%, for $3,270. At the beginning of Year 3 $25,000 is added and earns 10% for $9,072. At the end of Year 3, the account value is $99,792. FINA201 - Portfolio Project Directions 4 What is the time weighted return and what is the dollar weighted return for this investment over the three years? 4. Inflation adjusted (real) vs. nominal return If inflation is 3% in a year and the nominal rate of return is 6%, what is the inflation adjusted (real) rate of return (Real rate = (1+nominal rate) / (1+inflation rate))? 5. Total return: the income produced, plus or minus any capital gain or loss, divided by the purchase price paid. If a stock was valued at $50 one year ago and received a dividend of $3, and was then sold for $49, what is the total return? 6. Required rate of return (Risk adjusted return): What is the required rate of return for a stock whose beta is 1.3, the risk free rate is 2%, and the market rate of return is 7% (r(i) = r(f) + (r(m) - r(f)) X )? 7. Holding period return: HPR = (Income + Appreciation - Expenses) / Purchase price 8. Internal rate of return: this is the rate that equates the present value of all of an investment's cash inflows with the present value of its outflows, producing a net present value of zero. For the following cash outflows and inflows, what is the internal rate of return? Year 1: $50,000 outflow Year 2: $20,000 inflow Year 3: $10,000 outflow Year 4: $14,000 inflow Year 5: $38,000 inflow 9. Yield to maturity: is its internal rate of return per year throughout a known holding period. You will buy a bond in six months with a $100 face value for $895 and has a 7% coupon rate with interest payable semi-annually, maturing in 4 and one half years. What is its Yield to Maturity? FV = ? PMT = ? n=? PV = ? i=? 10. Yield to call: on a callable security, the Yield to Call (YTC) is calculated the same way as Yield to Maturity, except that the call price is used as the future value, and the next date on which it may be called is used for the value of n. A $1,000 face amount bond with a 9% coupon rate and interest payable semi-annually is now selling for $910. It can be called any time, starting three years from now. What is the YTC? PMT = ? PV = ? n=? FINA201 - Portfolio Project Directions 5 FV = ? i=? 11. Current yield: is the annual income from a security divided by its current price. What is the current yield of a stock selling at $75 paying an annual dividend of $5.50? 12. Taxable equivalent yield: for investments yielding tax free interest, eg. Municipal bonds, the taxable equivalent yield is calculated by dividing the tax-free yield by the quantity one minus the investor's marginal tax rate. Taxable-equivalent yield = Tax-free yield / (1-tax rate) If you have a marginal federal and state tax bracket of 36% and the tax free rate is 16.2%, what is the taxable-equivalent yield? Upload your document and submit. Part 4 - Bond and Stock Valuation Concepts and Calculations: Due by the end of Week 6 at 11:59 pm, ET. Complete each of the following items: 1. Bond duration and convexity: a bond's duration is the weighted number of years it takes for the investor to receive the present value of all of the bond's future cash inflows. The weights used are the number of years the investor must wait for each of those cash inflows. If an investor buys a bond for $906.93 and comparable bonds are yielding 11%. The bond $1,000 par value; an 8% annual coupon and four years until its maturity. What is the bond's duration? 2. Capitalized Earnings: requires estimating the security's intrinsic value. This is the present value of the net cash inflows it is expected to generate for the investor. Assume that a preferred stock, perpetuity, is expected to pay a dividend of $3.25 each year. If the appropriate discount rate is considered to be 12%, what is its intrinsic value? 3. Ratio Analysis A. Price/earnings: measures the ratio of market price to earnings per share. P/E = Price per share / earnings per share. An investor has determined that a reasonable P/E for company's stock is $15. The earnings per share for a company is projected at $2 per share. What is a reasonable price for the stock? B. Price/free cash flow: uses operating cash flow which is net of any new investment or cash remaining after satisfying capital expenditures. C. Price/sales: this ratio is valuable for companies having no earnings to report. 4. Book value: this is the value of each stock share based on the books and based on historical cost. BV = (Total stockholder equity - Liquidation value of preferred stock) Outstanding Common Shares If Company A's Total Stockholder Equity = $1,000,000 Liquidation Value Preferred Stock = $500,000 Outstanding Common Shares = 10,000 FINA201 - Portfolio Project Directions 6 What is the Book Value of Company A? Upload your document and submit. Part 5 - Depreciation Calculations: Due by the end of Week 7 at 11:59 pm, ET. Complete each of the following items: 1. Modified Accelerated Cost Recovery System: A company has purchased an asset for $100,000 and paid an additional $10,000 for delivery. What is the depreciable basis for this asset? If the percentage depreciation in the first year is 20%, what is the recovery allowance? 2. Amortization: Over its useful economic life, an intangible asset's recorded cost must be allocated to the periods benefited. It normally relies on the straight-line method over the estimated economic life of the asset. If an asset has a depreciable basis of $150,000 and a ten-year life, what will be the amount of amortization for each of the ten years? 3. Depletion: The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. Depletion is similar to depreciation in that, it is a cost recovery system for accounting and tax reporting. For tax purposes, there are two types of depletion; cost depletion and percentage depletion. Upload your document and submit. Portfolio Project Reflection & Upload Portfolio Project to your electronic portfolio. Due by the end of Week 7.5 at 11:59 pm, ET. After finalizing all parts of your Portfolio Project, compose a reflection that addresses the following items: 1. Reflect on and assess the value of what you have learned through the completion of this project. 2. Explain how you believe you could apply what you learned in order to become more successful in the workforce. 3. Describe what you might do differently if asked to complete similar projects in the future and explain why. 4. Describe what advice you would give to a student who is just beginning this project. Electronic portfolio Submission: Combine all parts of your Portfolio Project (Part 1 through 5, and Reflection) into one Word document. Upload your document to your electronic portfolio