Question

@jim_thompson5910 I have this project over stocks and i was wondering if you could help me. If not feel free to say no but you seem like the only one who will!

Answer 1

Were you able to get started on it?

Answer 2

somewhat

Answer 3

ok post what you have so far

Answer 4

along with the full instructions

Answer 5

alright there are five parts.

Part I:Part I: Client Profile
Create a fictional client for whom you will create an investment portfolio. You must provide the client's
name
age
occupation
family situation (i.e., single, married, single with children, or married with children)
investment goals

Answer 6

part II:Part II: Diversified Portfolio
Using the tabs below and the information contained within, choose five investments. The collection of investments may include stocks, bonds, and/or cash equivalents. You have $5,000 to invest. For any stocks you purchase, you will choose the number of shares.

For each stock you choose, send your instructor the
type of stock/company
number of shares purchased (Note: You will make up this number.)
price per share
initial investment in each stock (Hint: Multiply the number of shares purchased by the price per share.)
For any bonds you choose, send your instructor the
type of bond
interest rate
bond value
bond price
For any cash equivalents you choose, send your instructor the
type of account
interest rate
compounding frequency
principle amount invested
Reminder: You are investing a total of $5,000. So, be sure the total amount of your investments (stocks, bonds, and/or cash equivalents) equals $5,000.

Answer 7

and feel free to back out at any time i just don't know what the heck i'm doing and i understand its overwhelming.

Answer 8

Part III: Final Investment Value
It is one year later and your client needs the status of their accounts. Select any stocks your client purchased to see how they performed over the last year. Select any bonds your client purchased to ensure the government or company did not default on their loan. Calculate the value of any cash equivalent accounts. Show your work.
Note: You are not being evaluated on how well the portfolio performed. So no peeking before choosing the investments! You'll take the fun out of it.
For each stock you choose, send your instructor
type of stock/company
number of shares purchased
final price per share rounded to the nearest cent
final investment value rounded to the nearest cent
For any bonds you choose, send your instructor
final investment value rounded to the nearest cent (Note: For all bonds that are stable, calculate the bond yield. If the bond is not stable, a final investment value will be given.)
For any cash equivalents you choose, send your instructor
final investment value rounded to the nearest cent

Answer 9

part 1 should be pretty straight forward. Do you have an answer for part 1?

Answer 10

Yes
name: Darien Pottinger
age: 25
occupation: Sales Associate
family situation (i.e., single, married, single with children, or married with children) Single
investment goals

Answer 11

and i thought i would ask you what the investment goals should be

Answer 12

and I've started on part two because there is a chart. (I don't know to to screenshot and send it to you but i will do it and be right back.

Answer 13

investment goals are basically what you want to aim for and for how long

do you want to wait a long time? or a short time?

the shorter the wait, the more risky things get

Answer 14

retirement is one common goal for a lot of people

a college fund is another common goal

Answer 15

okay then probably retirement since its not so risky right?

Answer 16

yeah if you start early, then you have a long time to save up and invest (eg: if you start at age 35 and retire at age 65, then you have 30 years to build up money)

Answer 17

okay that sounds good. also i have no idea what stocks, bonds, or cash equivalents to pick.

Answer 18

well thankfully this isn't happening in the real world with real money, so you don't have to worry about making the wrong choices

Answer 19

I recommend you just stick to the well known and established companies. Their risk isn't that high because they are known to turn a profit and grow the company.

Answer 20

okay i have to do 5 of each and my budget is $5000 so i will do 2 stocks, 2 bonds, and 1 cash equivelant.

Answer 21

5 of each? so 5 stocks, 5 bonds, 5 cash equivalents?

Answer 22

oops sorry 5 total

Answer 23

actually i might do 3 cash equivalents and 1 stock and one bond because it seems easier.

Answer 24

oh ok

Answer 25

yeah do what you feel is easiest

Answer 26

here's a definition if you need it

http://www.investopedia.com/terms/c/cashequivalents.asp

Answer 27

okay for the stock
type of stock/company: Common stock in a medical company with a proven track record. They are about to unveil their latest design in surgical equipment.
number of shares purchased (Note: You will make up this number.)
price per share: $56.62
initial investment in each stock (Hint: Multiply the number of shares purchased by the price per share.)

Answer 28

how many shares should i purchase?

Answer 29

let me think

Answer 30

well there's definitely an upper limit

you can't buy 100 shares for instance because

100*56.62 = 5662

but we've gone over our budget of $5000

Answer 31

For any bonds you choose, send your instructor the
type of bond: US Treasury bond
interest rate: 1.375%
bond value: $1500
bond price: $1500

For any cash equivalents you choose, send your instructor the
type of account: banking with us "Savings acct
interest rate: .05%
compounding frequency: annually
principle amount invested (up to you)

cash equivalent

type of account Invest here "savings account"
interest rate: .025%
compounding frequency: semi-annually
principle amount invested (again, up to you)


cash equivalent

type of account "bank with us" money market act
interest rate.20%
compounding frequency: monthly
principle amount invested

Answer 32

okay should i do a budget of $1000 dollars for each?

Answer 33

that sounds fair since you have 5 total parts

Answer 34

alright so 1000/56.62=17.66 so about 17 shares for the stock?

Answer 35

that's correct

Answer 36

alright one second

Answer 37

okay so the initial investment in each stock for the stock would be $962.54

Answer 38

that is correct

so you have a bit leftover to invest in something else

Answer 39

i have all of the info for the bond, now to see how much the principal amount invested should be

Answer 40

it says "bond price: $1500"

so that is the lowest it can go I think?

Answer 41

oh okay. sounds right

Answer 42

so if you invest $1500 in bonds, then you will have invested a total of 962.54+1500 = 2,462.54 dollars so far

Answer 43

that leaves me with $2537.46 to put into the cash equivalents. i think i know what equation to use for those but i'm not sure.

Answer 44

I don't know how to insert it but its the m=P then i(1+i)^nt over (1+i)^nt -1

Answer 45

what formula is that for again?

Answer 46

compound interest

Answer 47

is m the monthly payment?

Answer 48

yes!

Answer 49

I don't think you need that formula here

Answer 50

now that i think about it thats probably not the right one

Answer 51

sorry i had a brain fart haha

Answer 52

that's if you wanted to figure out how much per month you'd pay for things like car loan, home loan, etc

Answer 53

oh yeah!

Answer 54

I think you'll use the formula

A = P*(1+r/n)^(nt)

Answer 55

to figure out how much interest you compound and that gets added to your account

Answer 56

alright what about the principal interests for those? should i start out with like $200 dollars maybe?

Answer 57

you have $2537.46 left to invest in cash equivalents

Answer 58

you have 3 parts left (3 cash equivalents)

Answer 59

2537.46/3 = 845.82

so why not invest $845.82 per cash equivalent

Answer 60

but wouldn't interest make it more?

Answer 61

yes over time, you'll grow $845.82 to some amount more (due to interest)

Answer 62

oh alright and i know t equals the amount of time but what would i put for that?

Answer 63

the length of how long you're willing to invest

Answer 64

30 years?

Answer 65

sure that works, esp for retirement

Answer 66

alright i calculated that and it came out to be $254.62

Answer 67

ok one sec

Answer 68

i think i did that wrong haha

Answer 69

i actually got $3655.68

Answer 70

which account are you investing in again? and how much are you investing?

Answer 71

type of account: banking with us "Savings acct
interest rate: .05%
compounding frequency: annually
principle amount invested: $845.82

Answer 72

and that's really 0.05% and not 5% ?

dang that's a really low interest rate

Answer 73

yeah on the chart it started out low so i just picked that one haha

Answer 74

so,

A = P*(1+r/n)^(n*t)

A = 845.82*(1+0.0005/1)^(1*30)

A = 858.599713631154

A = 858.60

Answer 75

i just now saw that it doesn't say to work them out yet. on part III it says it wants the final value of all of them but how would i do that?

Answer 76

so you can see that 0.05% is really dismal if you go from $845.82 to $858.60 in 30 years

Answer 77

you earn 858.60 - 845.82 = 12.78 dollars...over 30 years

Answer 78

wow thats awful

Answer 79

agreed

Answer 80

good think its not real lol but i have one last question so you don't have to help me with the whole thing because i know its boring and i'm probably bothering you

Answer 81

and thank you so much for the help so far. you're a lifesaver!

Answer 82

I have a feeling it's 5%

if it was 0.05%, then I think no one would invest (esp if they knew what they truly earned over such a long time)

Answer 83

anyways, go ahead

Answer 84

It is one year later and your client needs the status of their accounts. Select any stocks your client purchased to see how they performed over the last year. Select any bonds your client purchased to ensure the government or company did not default on their loan. Calculate the value of any cash equivalent accounts. Show your work.
Note: You are not being evaluated on how well the portfolio performed. So no peeking before choosing the investments! You'll take the fun out of it.


For each stock you choose, send your instructor
type of stock/company
number of shares purchased
final price per share rounded to the nearest cent
final investment value rounded to the nearest cent

For any bonds you choose, send your instructor
final investment value rounded to the nearest cent (Note: For all bonds that are stable, calculate the bond yield. If the bond is not stable, a final investment value will be given.)


For any cash equivalents you choose, send your instructor
final investment value rounded to the nearest cent

Answer 85

for the stock, I'd look up how the stock did over the last year

you can't know how well it performs in the future, but you can look up past data

Answer 86

for the stock it shows how the price changed i just need to know how to do the calculations for it. :/

Answer 87

for the stock, what do the dollar figures represent exactly?

Answer 88

in the blue and black fonts

Answer 89

the stock price?

Answer 90

the $56 was the price per share. and the $38 is how much it went down

Answer 91

oh I see, so you lose money over time

Answer 92

and part four is just calculating the return on the investment and part five is calculating the mean, median, and weighted mean for the investment so i should be able to do that on my own but I'm too tired tonight.

Answer 93

yeah :/

Answer 94

hmm let me think