John Stewart & ABC Portfolio Analysis
Deliverable Length: 700-900 words
John Stewart has recently joined ABC in the capacity of an investment advisor. As a way to attract additional clients, John has asked for your help in preparing some educational material for a seminar taking place later this month.
He has asked you put together a report on the following investments and calculate the returns of these investments (including dollar values and percentages) to illustrate how they work.
Assignment
Perform the 5 calculations listed below:
Show all of your work as well as any formulas that you used.
If you used MS Excel to arrive at your answers, then you must provide an explanation of your methodology.
A stock that does not pay a dividend of which you buy 100 shares for $25.00 per share and sell the 100 shares for $27.50 per share a year later. You pay the $50.00 commission when you sell the securities.
A 5-year bond that you purchase for $1,000 pays a 6% yearly rate. It is paid semiannually, and you hold the bond until maturity.
The current yield on a bond that is priced at $89 has a 6% coupon.
The yield-to-maturity (YTM) on a 7.25% ($1,000 par value) bond that has 10 years remaining to maturity, currently trading in the market at $825.
The holding period return (HPR) for 1,000 shares of a no-load mutual fund currently selling at an NAV of $11, purchased a year ago at an NAV of $10.50 per share, including $300 of distributed investment income dividends and capital gains dividends of $350.
Next, answer the following questions:
Explain systematic and unsystematic (also known as nonsystematic) risk.
What are the different types of investments a person can make?
Explain a stock’s beta coefficient and how it ties into systematic versus unsystematic risk.
What are the differences between the various types of bonds?
What do bond ratings indicate, and what 2 major agencies are in charge of assigning these ratings?
Compile your calculations, MS Excel tables and explanations (if applicable), and your responses to the 5 points above into a single Word document.
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