You are a financial advisor, and you have several investment appointments today with different clients. Some of the appointments involve clients looking to invest for different goals, some have questions regarding investing in general, and some have questions about existing investments they are currently holding in their portfolios.

Be sure to read through each question carefully and answer each question in full. Consider each client scenario to be separate from the other scenarios, meaning, information for one client will not be the same for another client.

Scenario #1 Mitchell is 25 years old and is looking to invest for the first time. He is unsure of his investment goals and how much he can contribute. Instead, he is looking for some general advice to help him get started. Please advise Mitchell on the following: (12 points)

a) Briefly describe each of the following factors that affect investment choices. (4 points)

a. Risk

b. Income

c. Growth

d. Liquidity

b) Describe what diversification in investing means and provide an example. (3 points)

c) Mitchell mentions that people tell him to avoid investing in something risky. Provide an example of a low-risk investment and a high-risk investment. Also, list three types of risk that could affect investment choices. (5 points)

Scenario #2 Deborah has come to see you to do two different stock transactions. The first transaction is a purchase. Deborah has $15,000 and would like to buy as many shares as possible of Telus that she can. Telus shares are currently trading at $23/share. The commission payable for the purchase is $9. The second transaction is a sale. Deborah has owned 175 shares of RBC Stock for 7 years (including this year) and would like to sell all her RBC stock. She purchased the shares at $85 per share. There is no commission for sales. Please calculate the following: (9 points)

a) How many shares of Telus will Deborah buy? Assume she can buy partial shares. (2 points)

b) Each year that Deborah has owned RBC stock (including this year), it has paid an annual dividend of $2.50 per share. How much has Deborah made in dividend earnings (before tax)? (2 points)

c) Deborah sells her RBC shares for $137 per share. How much are her net proceeds from the sale? She did not pay a commission when she bought the shares. (5 points)

Scenario #3 Kristi purchased three different stocks at the start of the year, and she has come to you for help with some calculations. She is trying to determine which stock has provided the best overall return for her portfolio for the past year. The information for the stocks is as follows: (15 points)

	Stock 1	Stock 2	Stock 3
Stock price @ purchase	$28/share	$48/share	$30/share
Current stock price	$37/share	$61/share	$24/share
Number of stocks owned	125	215	175
Annual dividend Year 1	$1.25/share	No dividend	$2.00/share
BETA	1.14	0.75	1.01

a) Calculate the Annual Shareholder Return for Stock 1, if Kristi sold all her shares today (4 points)

b) Calculate the annual shareholder return for Stock 2, if Kristi sold all her shares today (4 points)

c) Calculate the annual shareholder return for Stock 3, if Kristi sold all her shares today (4 points

d) Based on the BETA values, which stock is the most volatile and which stock is the least volatile? (2 points)

e) Which stock has provided Kristi with the greatest return since the date of purchase? (1 point)

Scenario #4 Paul is a long-time stock investor and has a high net worth. In the past five (5) years, he has purchased stocks in Scotiabank each year because he believes it is a strong investment opportunity. He has come to you to get your opinion if now is the right time to sell his Scotiabank stock. In the past five (5) years, Paul has purchased $12,000 worth of Scotiabank stock each year at the following prices (assume he can buy partial shares): (7 points)

a. Year 1 - $91/share

b. Year 2 - $87/share

c. Year 3 - $72/share

d. Year 4 - $78/share

e. Year 5 - $84/share

a) Please calculate Pauls total investment in Scotiabank shares (1 point)

b) How many Scotiabank shares does Paul own? Assume no commissions for purchases. (2 points)

c) What was his average cost per share? (1 point)

d) What method of investing is Paul utilizing to purchase Scotiabank shares? (1 point)

e) If Scotiabank stock is currently trading at $88/share, is now a good time for him to sell? Why or why not? (2 points)

Scenario #5 Miles is a personal investment client of yours. He owns and operates a large corporation in the area and is looking to raise funds to expand his operation. He is considering all his options, including issuing a corporate bond. He has come to you for some advice regarding corporate bonds. Please advise on him on the following: (10 points)

a) What do the following terms mean par value, maturity date, coupon rate, coupon payment, and bondholder? (5 points)

b) If Miless corporation issues a $75,000 10-year bond that pays an 8% coupon, how much will the company be required to pay as a semi-annual coupon payment? What is the total cost to the corporation when the bond comes due? (3 points)

c) Miles is also considering issuing a Treasury Bill, what are two differences between a Treasury Bill and a Bond? (2 points)

Scenario #6 Eddie owns two corporate bonds. The ABC Inc. Corporate bond is a $40,000 10-year corporate bond that pays a 5% coupon. He has held the coupon for three (3) years. The XYZ Ltd. Corporate bond is a $65,000 15-year corporate bond that pays a 10% coupon. He has held the coupon for seven (7) years. The ABC Inc. bond is now valued at a 3% coupon and the XYZ Ltd. bond is valued at a 13% coupon. He has come to you for advice on if he should hold or sell the bonds. Please answer the following questions. (10 points)

a) What would be the sale value of the ABC Inc. bond if he were to sell today at a premium? Should he sell it, why or why not? (5 points)

b) What would be the sale value of the XYZ Ltd. bond if he were to sell today at a discount? Should he sell it, why or why not? (5 points)

Scenario #7 Cody is a first-time investor that is looking to buy into a mutual fund. He is considering between three mutual funds (listed below) and has come to you for advice. Please help him with the following: (14 points)

	Mutual Fund 1	Mutual Fund 2	Mutual Fund 3
Assets	$75,250,000	$104,500,000	$129,500,000
Liabilities	$15,050,000	$35,600,000	$22,000,00
Shares Outstanding	2,000,000	1,750,000	3,000,000

a) What is the NAVPS of Mutual Fund 1 (2 points)

b) What is the NAVPS of Mutual Fund 2 (2 points)

c) What is the NAVPS of Mutual Fund 3 (2 points)

d) If Mutual Fund 1 has a front-end load of 3.5%, Mutual Fund 2 has a front-end load of 2% and Mutual Fund 3 has no front-end load, with which mutual fund will Cody be able to buy the most units if he has $7,000 to invest (assume partial units can be sold)? (4 points)

e) Please advise Cody on two advantages and two disadvantages of owning mutual funds. (4 points)

Scenario #8 Sandy invested in four (4) different mutual funds in her TFSA portfolio at the start of the year and is looking to sell a portion of those investments today to buy a car. She has invested $9,500 into each of the mutual funds. The financial details of the mutual funds are as follows: (23 points)

Mutual Fund 1 Purchase NAVPS - $35/unit Current NAVPS - $41/unit Paid $1.10/unit dividend 4% front-end load No back-end load	Mutual Fund 2 Purchase NAVPS - $28/unit Current NAVPS - $32/unit No dividend paid 2% front-end load 5% back-end load if withdrawal is within first two years of purchase
Mutual Fund 3 Purchase NAVPS - $42/unit Current NAVPS - $35/unit Paid $1.45/unit dividend No front-end load No back-end load	Mutual Fund 4 Purchase NAVPS - $45/unit Current NAVPS - $35/unit Paid $0.55/unit dividend 6% front-end load 2% back-end load if withdrawal is within first five years of purchase

Sandy has come to you for some financial advice about the value of her mutual funds and for your opinion on the best withdrawal options. Assume that the dividends paid out to Sandy did not re-invest for more mutual fund units. Please advise Sandy on the following:

a) What is Sandys total investment in her TFSA portfolio? (1 point)

b) Calculate how many units of each mutual fund she purchased (each mutual fund allows for partial units) (8 points)

c) Calculate the amount of earnings she would receive if she sold all her units in each mutual fund today. (12 points)

d) Based on your calculations, which mutual funds should she withdraw money from if she needed $15,000 to purchase the car and why? (2 points)