business finance case study
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages To Order 5-10 Pages Description/Paper Instructions
urgent
Each Activity need at least 4 pages and deliver separate documentsActivity 2
Part A:
By the end of this year you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and
you expect to live 20 years after retirement. Upon retirement you wish to have an annual sum of $50,000 to supplement your
social security benefits. Therefore, you opened now your retirement account with 7% annual interest rate. At retirement you
liquidate your account and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments based
on a 6 % coupon rate, throughout your retirement years.
How much will the face value of the bond that you will be investing?
Please calculate the monthly payment in your retirement account in order to be able to achieve the plan mentioned above?
How much will your inheritors receive?
Now let’s extend the problem so that you protect yourself against inflation.
Part B:
Suppose you think if you were to retire right now you would have needed $50,000 each year to supplement your social security
and maintain your desired lifestyle. But because there is on average 3% annual inflation, when you retire in 30 years from now you
need more than $50,000 per year to maintain the lifestyle you like.
How much will be equivalent to $50,000 at the retirement time when adjusted for inflation?
How much will be the face value of the bond that yields the equivalent of $50,000, found in #4 of Part B in coupon payment?
How much annual payment in the retirement account is needed to accumulate the amount needed to purchase the bond when
retiring?
What is the purchase power of the amount that will be received by your inheritors, measured in the current value of $ at the time
of opening the retirement account?
(Hint: First calculate what future amount in 30 years, which is equivalent to $50,000 of now and then solve the rest of the problem).Provide your explanations and definitions in detail and be precise. Comment on your findings. Provide references for content
when necessary. Provide your work in detail and explain in your own words. Support your statements with peer-reviewed in-text
citation(s) and reference(s).
Activity 3
This activity has two parts, please answer both
Two bonds A and B have the same credit rating, the same par value and the same coupon rate. Bond A has 30 years to maturity
and bond B has five (5) years to maturity. Please demonstrate your understanding of interest rates risk by answering the
following questions :
Discuss which bond will trade at a higher price in the market
Discuss what happens to the market price of each bond if the interest rates in the economy go up.Which bond would have a higher percentage price change if interest rates go up?
Please substantiate your argument with numerical examples.
As a bond investor, if you expect a slowdown in the economy over the next 12 months, what would be your investment strategy?
Familiarity with random variables is essential to understand the basics of portfolio theory. Given that CLA2 assignment is about portfolio formation, you need to strengthen your skills in dealing with random variables. Please review and explain the significance of basic concepts about random variables, namely, the mean, the variance, the standard deviation, and the
correlation.
Provide your explanations and definitions in detail and be precise. Comment on your findings. Provide references for content
when necessary. Provide your work in detail and explain in your own words. Support your statements with peer-reviewed in-text citation(s) and reference(s).
RUBRIC
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. The 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. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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