FIN 402 MASTER Inspiring Minds/fin402master.com

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FIN 402 MASTER Inspiring Minds/fin402master.com
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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. In addition to the life
insurance proceeds, Carolyn has 37,500 in a
savings account, which she had accumulated over
the past 10 years. Recognizing that she is within
10 years of retirement, Carolyn wishes to invest
her limited resources so she will be able to live
comfortably once
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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
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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.
Recently Ravi uncovered a stock that, on the
basis of extensive analysis, he feels is about to
take off. The stock, Running Shoes (RS),
currently trades at 20 per share. Ravi feels it
should soar to at least 50 within a year. RS
pays no dividends, the
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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, Angel has become an avid
reader. He enjoys reading about current events
and personal finance, particularly investing. He
especially likes Money magazine, from which he
has gained numerous ideas for better managing the
familys finances. Because
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FIN 402 Week 1 Assignment Case Problem 12.1
Reverend Mark Thomas Ponders Mutual Funds FOR
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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 and at the same time provide
some funds for his childs college education
(which is still some 12 years away). He is not
out to break any investment records but wants
some backup to provide for the long-run needs of
his family. Although he has a modest income, Mark
Thomas
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FIN 402 Week 1 AssignmentCase 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. Attracted to the hot market for
technology stocks, Dara was interested in
purchasing a tech IPO stock and identified
NewestHighTech.com, a company that makes
sophisticated computer chips for wireless
Internet connections, as a likely
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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? 3. From the investment banker's
point of view, the major reason syndicates are
formed in the distribution of large issues is for
the purpose of 4. ___________ has two major
functions to handle special orders, such as
purchases with a price contingency and to
maintain continuous, liquid, orderly markets
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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.
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FIN 402 Week 2 Assignment Case Problem 2.1
Traditional Versus Modern Portfolio Theory Whos
Right FOR MORE CLASSES VISIT www.fin402master.co
m   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, when the
subject of investments came up. Each had always
been fascinated by the stock market, and now that
they had achieved some degree of financial
success, they had begun actively investing. As
they discussed their
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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. Investment A provided a
relatively certain stream of income. Dave was a
little less certain of the income provided by
investment B. From his search for suitable
alternatives, Dave found that the appropriate
discount rate for a
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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)
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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, she has
gathered dividend income and share price data for
both over the last 10 years (20072016). Mollys
investigation of the outlook for these issues
suggests that each will, on average, tend to
behave in the future just as it has in the past.
She therefore believes that the expected return
can be
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FIN 402 Week 2 Assignment Case Problem 5.2 Susan
Lussiers Inherited Portfolio Does It Meet Her
Needs FOR MORE CLASSES VISIT www.fin402master.co
m   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. Her
current philosophy is to live each day to its
fullest, not concerning herself with retirement,
which is too far in the future to require her
current attention. A month ago, Susans only
surviving parent, her father, was killed in a
sailing accident. He had retired in La Jolla,
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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. The
portfolio currently contains common stock,
industrial bonds, mutual fund shares, and
options. They acquired each of these investments
during the past three years, and they plan to
purchase other investments sometime in the
future. Currently, the Stalchecks are interested
in measuring the return on their
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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)? 3. Assume the same
facts as in problem 2, but with an ERP of 9
percent. What is the new value for Ke? What does
this tell you about investors feelings toward
risk based on the new ERP?
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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)
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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. Not long ago Sara attended a seminar on
investing in the stock market, and since then
shes been doing some reading about the market.
She has concluded that keeping all of her money
in low-
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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 FIN 402
Week 3 Assignment Case Problem 9.2 Deb Takes
Measure of the Market
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FIN 402 Week 3 AssignmentCase Problem 6.2 Wally
Wonders Whether Theres a Place for Dividends
FOR MORE CLASSES VISIT www.fin402master.com   C
ase 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,
high-quality issues are his best bet. He has
become a bit perplexed lately with the market,
disturbed that some of his growth stocks arent
doing even as well as many good-grade income
shares. He therefore decides to
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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 reports from his broker
at no cost. (In fact, Bob Smith, his broker, has
been volunteering such services for years.)
Recently Jack has been keeping an eye on a small
chemical stock.
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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 and sent her some literature
and analytical reports to study. One report,
prepared by the brokerage house she deals with,
provided an up-to-date look at the economy, an
extensive study of the auto industry, and
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FIN 402 Week 3 AssignmentCase 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. Because of his
age, income level, and desire to get as big a
bang as possible from his investment dollars, he
has decided to invest in speculative, high-growth
stocks. Chris is currently working with a
respected Beverly Hills broker and is in the
process of building up
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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. Marc has decided to take a closer look at
CI to assess its investment potential. Assume
the companys sales for the past five years have
been as follows Marc is concerned with the
future prospects of the company, not its past. As
a result,
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FIN 402 Week 3 AssignmentCase 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. But before
she does, she wants to use her newfound knowledge
in technical analysis to determine whether now
would be a good time to enter the market. Deb has
decided to use all of the following measures to
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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. What is the
expected return on a stock with a beta of 1.3?
3. The market portfolio has a beta of
__________. 4. You have a 50,000 portfolio
consisting of Intel, GE and Con Edison. You put
20,000 in Intel, 12,000 in GE and the rest in
Con Edison. Intel, GE and Con Edison have betas
of 1.3, 1.0 and 0.8 respectively. What is your
portfolio beta?
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FIN 402 Week 3 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. 1.      (2 point) Use
the expected return and Beta calculated in Week 2
Homework Questions 1 for the stocks listed PG,
Microsoft, Macys, JP Morgan Chase and Southern
Company. You will make three portfolios a.      
Equal weight each of the stocks in the
portfolio b.      Select the two lowest beta
stocks and weight them at 30 each, the two
highest beta stocks at 10 each, and the last one
at 20 (Low beta portfolio) c.       Select the
two highest beta stocks and weight them at 30
each of the portfolio, the two lowest beta stocks
at 10 and the last one at 20 (high beta
portfolio)
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FIN 402 MASTER Inspiring Minds/fin402master.com