FINA 385 Lecture Notes - Lecture 10: Mutual Fund, Savings Account, Cash Advance

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rubyyellowjacket692

28 Jun 2016

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The decision to establish an investment plan is an important first step to accomplishing your long-term financial goals. Like other decisions, the decision to start an investment plan is one you must make for yourself. No one is going to make you save the money you need to fund an investment plan. These things won"t be done unless you want to do them. In fact, the specific goals you want to accomplish must be the driving force behind your investment plan. Establishing investment goals: by december 31, 2018, i will have total assets of ,000. The following questions will help you establish your financial goals. For example, you may establish a short-term goal of accumulating ,000 in a savings account over the next 18 months. You may then use the ,000 to purchase stocks or mutual funds to help you obtain your intermediate or long-term investment goals.

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Scenario 7 Investment Portfolio You know that there is a trade-off between risk and return when you choose an investment. The greater the return you expect to receive, the larger the risk you must take. Most people cannot afford to risk much of their money on investments that offer a high return. This, however, does not mean that they must accept only low returns on their investments. Through diversification, a fair return can be achieved without taking unreasonable risks. Asset allocation is the process of choosing a variety of investments that offers different combinations of risk and return. Then, if one investment fails to do well, others may make up for its poor performance by being successful. The objective for each investor is to select a portfolio of investments that meets his or her individual financial goals. Your cousin, Maya (28 years) and her husband, Peter (32 years), have very different views when it comes down to investments. Peter wants to save some money for a down payment on a house and wants to put all their money in bank accounts, whereas Maya wants to put all their money into growth stocks so that they can accumulate the money faster. They are seeking your advice. What would you suggest them to do and why? (Use vocabulary â asset allocation, rule of 72, time factor, age, types of stocks, bonds, treasury securities, mutual funds)

emeraldmole779

I NEED TO KNOW TWO THINGS

1) What do I choose under finance on Excel . Example : FV, PV etc

2) what exactly block by block do I type in excel? Example: Rate ,pv, fv, type, etc

please do not post formulas unless it is from excel like above

You plan to buy a house in 7 years. you want to save money for a down payment on the new house. You are able to place $365 every month at the end of the months into a savings account at an annual rate 10.24% compounded monthly. How much money will be in the account after you made the last payment?

pinkbear906

The year is 2020. Youjust got your dream job as a stock broker on Wall Street. They gaveyou a nice signing bonus and you are making a lot of money. Youalso have the opportunity to make a large year-end bonus if youmeet your sales quota. But your Boss has a reputation for firingnew employees that donât reach those sales goals. Timing could nothave been better because your student loans are thru the roof andyour parents were just threatening to kick you out of the basement.You buy yourself a couple new suits, rent your apartment inManhattan and show up 30 minutes early to work ready to start yourcareer.

Your Boss, Mr. Moneybags, has you start cold calling people to get them to buy stock inTEXLA corporation. He says that TEXLA is a great new company thatis working on a new drug that might cure cancer. He failed to tellyou that the President of Texla is his brother-in-law. You startmaking sales calls and find out that the easiest people to convinceto buy the stock are senior citizens.

The first year youmake reach your sales quota and receive a 1 Million Dollars bonuswhich you immediately invest in TEXLA stock because it has beendoing so well. You also invested all of your parentâs retirementsavings in TEXLA. Later that year you accidentlyreceive an email that was addressed to Mr. Moneybags from hisbrother-in-law the President of TEXLA which informed him that thetesting shows their new drug actually makes cancer worse. You arethe only one who has this information and know that once thisinformation hits the internet the value of the stock will drop toZERO but no one will ever find out that you have this insideinformation. You also remembered from your awesome business lawclass that it is illegal to use âInside Informationâ to benefityourself or your clients.

Your Boss will losehis investment, you will lose your investment, your parentâsretirement savings will be lost along with all of those seniorcitizens that listened to your advice.

You only have an hourbefore the news will hit the press which means you canât calleveryone. What do you do?????

Identify theethical dilemma(s) in this situation.

REQUIREMENT

Use an ethical decision making model to determine theright course of action to take in thissituation.Use the Business Process Pragmatism as aguide for your answer.

BusinessProcess Pragmatism is :

Step 1
Inquiry

First, the decision maker must understand the problem. This stepinvolves identifying the parties involved (the stakeholders) andcollecting the relevant facts. Once the ethical problem or problemsare clarified, the decision maker lists any relevant legal andethical principles that will guide the decision.
Step 2
Discussion

In this step, the decision maker lists possible actions. Theultimate goals for the decision are determined, and each option isevaluated using the laws and ethical principles listed in Step1.
Step 3
Decision

In this step, those participating in the decision making worktogether to craft a consensus decision or consensus plan of actionfor the corporation.
Step 4
Justification

In this step, the decision maker articulates the reasons for theproposed action or series of actions. Generally, these reasonsshould come from the analysis done in Step 3.

The following case further demonstrates the types of situationsthat can occur when management demonstrates a lack of concern aboutethics.

5. Evaluation

This final step occursonce the decision has been made and implemented. The solutionshould be analyzed to determine if it was effective. The results ofthis evaluation may be used in making future decision

aquamarinezebra969

FINA 385 Lecture Notes - Lecture 10: Mutual Fund, Savings Account, Cash Advance

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