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Case Problem 1.2 Preparing Carolyn Bowen’s Investment Plan Carolyn Bowen, who just turned 55, is employed as an administrative assistant for the Xcon Corporation, where she has worked for the past 20 years. She is in good health, lives alone, and has two grown children. A few months ago her husband died, leaving her with only their home and the proceeds from a $75,000 life insurance policy. After she paid medical and funeral expenses, $60,000 of the life insurance proceeds remained. In addition to the life insurance proceeds, Carolyn has $37,500 in a savings account, which she had accumulated over the past 10 years. – PowerPoint PPT presentation

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Title: fin 402 master Focus Dreams/fin402masterdotcom


1
fin 402 master Focus Dreams/fin402masterdotcom
  •  
  •  
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  • FOR MORE CLASSES
    VISIT
  • www.fin402master.com

2
FIN 402 Week 1 Assignment Case Problem 1.2
Preparing Carolyn Bowens Investment Plan   FOR
MORE CLASSES VISIT www.fin402master.com   Case
Problem 1.2 Preparing Carolyn Bowens Investment
Plan Carolyn Bowen, who just turned 55, is
employed as an administrative assistant for the
Xcon Corporation, where she has worked for the
past 20 years. She is in good health, lives
alone, and has two grown children. A few months
ago her husband died, leaving her with only their
home and the proceeds from a 75,000 life
insurance policy. After she paid medical and
funeral expenses, 60,000 of the life insurance
proceeds remained.
3
FIN 402 Week 1 Assignment Case Problem 1.2, 2.1,
2.2, 3.1, 12.1   FOR MORE CLASSES VISIT
www.fin402master.com   FIN 402 Week 1
Assignment Case Problem 1.2 Preparing Carolyn
Bowens Investment Plan FIN 402 Week 1 Assignment
Case Problem 2.1 Daras Dilemma What to Buy? FIN
402 Week 1 Assignment Case Problem 2.2 Ravi
Dumars High-Flying Margin Account FIN 402 Week 1
Assignment Case Problem 3.1 The Perezes Good
Fortune FIN 402 Week 1 Assignment Case Problem
12.1 Reverend Mark Thomas Ponders Mutual Funds.
4
FIN 402 Week 1 Assignment Case Problem 2.2 Ravi
Dumars High-Flying Margin Account   FOR MORE
CLASSES VISIT www.fin402master.com   Case
Problem 2.2 Ravi Dumars High-Flying Margin
Account Ravi Dumar is a stockbroker who lives
with his wife, Sasha, and their five children in
Milwaukee, Wisconsin. Ravi firmly believes that
the only way to make money in the market is to
follow an aggressive investment posturefor
example, to use margin trading. In fact, Ravi has
built himself a substantial margin account over
the years. He currently holds 75,000 worth of
stock in his margin account, though the debit
balance in the account amounts to only 30,000.
5
FIN 402 Week 1 Assignment Case Problem 3.1 The
Perezes Good Fortune   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 3.1 The
Perezes Good Fortune Angel and Marie Perez own a
small pool hall located in southern New Jersey.
They enjoy running the business, which they have
owned for nearly three years. Angel, a retired
professional pool shooter, saved for nearly 10
years to buy this business, which he and his wife
own free and clear. The income from the pool hall
is adequate to allow Angel, Marie, and their
children, Mary (age 10) and José (age 4), to live
comfortably. Although he lacks formal education
beyond the 10th grade.
6
FIN 402 Week 1 Assignment Case Problem 12.1
Reverend Mark Thomas Ponders Mutual Funds   FOR
MORE CLASSES VISIT www.fin402master.com   Case
Problem 12.1 Reverend Mark Thomas Ponders Mutual
Funds The Reverend Mark Thomas is the minister of
a church in the San Diego area. He is married,
has one young child, and earns a modest income.
Because religious organizations are not notorious
for their generous retirement programs, the
reverend has decided he should do some investing
on his own. He would like to set up a program
that enables him to supplement the churchs
retirement program.
7
FIN 402 Week 1 Assignment Case Problem 2.1Daras
Dilemma What to Buy?   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 2.1Daras
Dilemma What to Buy? Dara Simmons, a 40-year-old
financial analyst and divorced mother of two
teenage children, considers herself a savvy
investor. She has increased her investment
portfolio considerably over the past five years.
Although she has been fairly conservative with
her investments, she now feels more confident in
her investment knowledge and would like to branch
out into some new areas that could bring higher
returns. She has between 20,000 and 25,000 to
invest.
8
FIN 402 Week 1 Individual Problem Set   FOR MORE
CLASSES VISIT www.fin402master.com   The
Problem Set is provided to you to enable you to
practice the concepts outlined in the textbook.
Select THREE completed problems from the
assignment and post your solutions to those
problems. 1. Creating prices for securities and
allowing for liquidity are functions of 2. Which
of the following best describes the function of
an investment banker selling an issue on a "best
efforts" basis?
9
FIN 402 Week 1 Individual Weekly Question   FOR
MORE CLASSES VISIT www.fin402master.com   Submit
your Weekly Questions, with original questions,
in a Microsoft Word or text file. Be sure to show
your work to earn full credit. Do not use
Investopedia, About.com, Wikipedia, or other
generic internet websites as sources. Use
credible sources only. Also, do not use quotes in
lieu of a response in your own words.
10
FIN 402 Week 2 Assignment Case Problem 2.1
Traditional Versus Modern Portfolio Theory Whos
Right   FOR MORE CLASSES VISIT www.fin402master.
com Case Problem 2.1 Traditional Versus Modern
Portfolio Theory Whos Right? Walt Davies and
Shane OBrien are district managers for Lee, Inc.
Over the years, as they moved through the firms
sales organization, they became (and still
remain) close friends. Walt, who is 33 years old,
currently lives in Princeton, New Jersey. Shane,
who is 35, lives in Houston, Texas. Recently, at
the national sales meeting, they were discussing
various company matters, as well as bringing each
other up to date on their families.
11
FIN 402 Week 2 Assignment Case Problem 4.1
Coatess Decision   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 4.1
Coatess Decision On January 1, 2017, Dave
Coates, a 23-year-old mathematics teacher at
Xavier High School, received a tax refund of
1,100. Because Dave didnt need this money for
his current living expenses, he decided to make a
long-term investment. After surveying a number of
alternative investments costing no more than
1,100, Dave isolated two that seemed most
suitable to his needs. Each of the investments
cost 1,050 and was expected to provide income
over a 10-year period.
12
FIN 402 Week 2 Assignment Case Problem 4.1, 4.2,
2.1, 5.2, 13.1 (Part a,b,c,d)   FOR MORE CLASSES
VISIT www.fin402master.com   FIN 402 Week 2
Assignment Case Problem 4.1 Coatess Decision FIN
402 Week 2 Assignment Case Problem 4.2 The
Risk-Return Tradeoff Molly ORourkes Stock
Purchase Decision FIN 402 Week 2 Assignment Case
Problem 2.1 Traditional Versus Modern Portfolio
Theory Whos Right FIN 402 Week 2 Assignment Case
Problem 5.2 Susan Lussiers Inherited Portfolio
Does It Meet Her Needs FIN 402 Week 2 Assignment
Case Problem 13.1 Assessing the Stalcheckss
Portfolio Performance (Part a,b,c,d).
13
FIN 402 Week 2 Assignment Case Problem 4.2 The
Risk-Return Tradeoff Molly ORourkes Stock
Purchase Decision   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 4.2 The
Risk-Return Tradeoff Molly ORourkes Stock
Purchase Decision Over the past 10 years, Molly
ORourke has slowly built a diversified portfolio
of common stock. Currently her portfolio includes
20 different common stock issues and has a total
market value of 82,500. Molly is at present
considering the addition of 50 shares of either
of two common stock issuesX or Y. To assess the
return and risk of each of these issues.
14
FIN 402 Week 2 Assignment Case Problem 5.2 Susan
Lussiers Inherited Portfolio Does It Meet Her
Needs   FOR MORE CLASSES VISIT www.fin402master.
com   Case Problem 5.2 Susan Lussiers Inherited
Portfolio Does It Meet Her Needs? Susan Lussier
is 35 years old and employed as a tax accountant
for a major oil and gas exploration company. She
earns nearly 135,000 a year from her salary and
from participation in the companys drilling
activities. An expert on oil and gas taxation,
she is not worried about job securityshe is
content with her income and finds it adequate to
allow her to buy and do whatever she wishes.
15
FIN 402 Week 2 Assignment Case Problem 13.1
Assessing the Stalcheckss Portfolio Performance
(Part a,b,c,d)   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 13.1
Assessing the Stalcheckss Portfolio Performance
Mary and Nick Stalcheck have an investment
portfolio containing four investments. It was
developed to provide them with a balance between
current income and capital appreciation. Rather
than acquire mutual fund shares or diversify
within a given class of investments, they
developed their portfolio with the idea of
diversifying across various asset classes.
16
FIN 402 Week 2 weekly Problem Set   FOR MORE
CLASSES VISIT www.fin402master.com   The
Problem Set is provided to you to enable you to
practice the concepts outlined in the textbook.
Select THREE completed problems from the
assignment and post your solutions to those
problems. In your solutions, provide an
explanation as to why you choose the answer. 1.
If RF 6 percent, b 1.3, and the ERP 6.5
percent, compute Ke(the required rate of
return). 2. If in problem 1 the beta (b) were 1.9
and the other values remained the same, what is
the new value of Ke? What is the relationship
between a higher beta and the required rate of
return (Ke)?
17
FIN 402 Week 2 weekly Problem Set   FOR MORE
CLASSES VISIT www.fin402master.com   1. (2
point) Calculate the expected return of the
following stocks using CAPM. You can use internet
websites to get Beta figures, such as Yahoo!
Finance, Google Finance, MSN Money, Marketwatch,
etc. Use 4 as the risk free rate and 6 as the
risk premium. a. Proctor Gamble (PG) b.
Microsoft (MSFT) c. Macys (M) d.
JP Morgan Chase (JPM) e. Southern Company
(SO).
18
FIN 402 Week 3 Assignment Case Problem 6.1 Sara
Decides to Take the Plunge   FOR MORE CLASSES
VISIT www.fin402master.com   Case Problem 6.1
Sara Decides to Take the Plunge Sara Thomas is a
child psychologist who has built a thriving
practice in her hometown of Boise, Idaho. Over
the past several years she has been able to
accumulate a substantial sum of money. She has
worked long and hard to be successful, but she
never imagined anything like this. Even so,
success has not spoiled Sara. Still single, she
keeps to her old circle of friends. One of her
closest friends is Terry Jenkins, who happens to
be a stockbroker and who acts as Saras financial
advisor.
19
FIN 402 Week 3 Assignment Case Problem 6.1, 6.2,
7.1, 7.2, 8.1, 8.2, 9.2   FOR MORE CLASSES VISIT
www.fin402master.com   FIN 402 Week 3
Assignment Case Problem 6.1 Sara Decides to Take
the Plunge FIN 402 Week 3 Assignment Case Problem
6.2 Wally Wonders Whether Theres a Place for
Dividends FIN 402 Week 3 Assignment Case Problem
7.1 Some Financial Ratios Are Real Eye-Openers
FIN 402 Week 3 Assignment Case Problem 7.2 Doris
Looks at an Auto Issue FIN 402 Week 3 Assignment
Case Problem 8.1 Chris Looks for a Way to Invest
His Wealth FIN 402 Week 3 Assignment Case Problem
8.2 An Analysis of a High-Flying Stock .
20
FIN 402 Week 3 AssignmentCase Problem 6.2 Wally
Wonders Whether Theres a Place for Dividends
  FOR MORE CLASSES VISIT www.fin402master.com  
Case Problem 6.2 Wally Wonders Whether Theres a
Place for Dividends Wally Wilson is a commercial
artist who makes a good living by doing freelance
workmostly layouts and illustrationsfor local
ad agencies and major institutional clients (such
as large department stores). Wally has been
investing in the stock market for some time,
buying mostly high-quality growth stocks as a way
to achieve long-term growth and capital
appreciation. He feels that with the limited time
he has to devote to his security holdings.
21
FIN 402 Week 3 AssignmentCase Problem 7.1 Some
Financial Ratios Are Real Eye-Openers   FOR MORE
CLASSES VISIT www.fin402master.com   Case
Problem 7.1 Some Financial Ratios Are Real
Eye-Openers Jack Arnold is a resident of Lubbock,
Texas, where he is a prosperous rancher and
businessman. He has also built up a sizable
portfolio of common stock, which, he believes, is
due to the fact that he thoroughly evaluates each
stock he invests in. As Jack says, You cant be
too careful about these things! Anytime I plan to
invest in a stock, you can bet Im going to learn
as much as I can about the company. Jack prefers
to compute his own ratios even though he could
easily obtain analytical.
22
FIN 402 Week 3 AssignmentCase Problem 7.2 Doris
Looks at an Auto Issue   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 7.2 Doris
Looks at an Auto Issue Doris Wise is a young
career woman. She lives in Phoenix, Arizona,
where she owns and operates a highly successful
modeling agency. Doris manages her modest but
rapidly growing investment portfolio, made up
mostly of high-grade common stocks. Because shes
young and single and has no pressing family
requirements, Doris has invested primarily in
stocks that offer the potential for attractive
capital gains. Her broker recently recommended an
auto company stock .
23
FIN 402 Week 3 Assignment Case Problem 8.1 Chris
Looks for a Way to Invest His Wealth   FOR MORE
CLASSES VISIT www.fin402master.com   Case
Problem 8.1 Chris Looks for a Way to Invest His
Wealth Chris Norton is a young Hollywood writer
who is well on his way to television
superstardom. After writing several successful
television specials, he was recently named the
head writer for one of TVs top-rated sitcoms.
Chris fully realizes that his business is a
fickle one, and on the advice of his dad and
manager, he has decided to set up an investment
program. Chris will earn about a half-million
dollars this year.
24
FIN 402 Week 3 AssignmentCase Problem 8.2 An
Analysis of a High-Flying Stock   FOR MORE
CLASSES VISIT www.fin402master.com   Case
Problem 8.2 An Analysis of a High-Flying Stock
Marc Dodier is a recent university graduate and a
security analyst with the Kansas City brokerage
firm of Lippman, Brickbats, and Shaft. Marc has
been following one of the hottest issues on Wall
Street, CI Medical Supplies, a company that has
turned in an outstanding performance lately and,
even more important, has exhibited excellent
growth potential. It has five million shares
outstanding and pays a nominal annual dividend of
0.05 per share.
25
FIN 402 Week 3 Assignment Case Problem 9.2 Deb
Takes Measure of the Market FOR MORE CLASSES
VISIT www.fin402master.com   Case Problem 9.2
Deb Takes Measure of the Market Several months
ago, Deb Forrester received a substantial sum of
money from the estate of her late aunt. Deb
initially placed the money in a savings account
because she was not sure what to do with it.
Since then, however, she has taken a course in
investments at the local university. The textbook
for the course was, in fact, this one, and the
class just completed this chapter. Excited about
what she has learned in class, Deb has decided
that she definitely wants to invest in stocks.
26
FIN 402 Week 3 Weekly Problem Set   FOR MORE
CLASSES VISIT www.fin402master.com   The
Problem Set is provided to you to enable you to
practice the concepts outlined in the textbook.
Select THREE completed problems from the
assignment and post your solutions to those
problems. In your solutions, provide an
explanation as to why you choose the answer. 1.
Which of the following are assumptions of the
simple CAPM model? 2. Consider the CAPM. The
risk-free rate is 6 and the expected return on
the market is 18.
27
FIN 402 Week 4 Assignment Case Problem 10.1 Max
and Veronica Develop a Bond Investment
Program   FOR MORE CLASSES VISIT
www.fin402master.com   Case Problem 10.1 Max
and Veronica Develop a Bond Investment Program
Max and Veronica Shuman, along with their teenage
sons, Terry and Thomas, live in Portland, Oregon.
Max is a sales rep for a major medical firm, and
Veronica is a personnel officer at a local bank.
Together they earn an annual income of around
100,000. Max has just learned that his recently
departed rich uncle has named him in his will to
the tune of some 250,000 after taxes. Needless
to say, the family is elated. Max intends to
spend 50,000 of his inheritance .
28
fin 402 master Focus Dreams/fin402masterdotcom
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