Answer the following questions and complete the following problems, as applicable.
- Question 1:
- Proficient-level: “Classify the following transactions as taking place in the primary or secondary markets:
- IBM issues $200 million of new common stock.
- The New Company issues $50 million of common stock in an IPO.
- IBM sells $5 million of GM preferred stock from its marketable securities portfolio.
- The Magellan Fund buys $100 million of previously issued IBM bonds.
- Prudential Insurance Co. sells $10 million of GM common stock” (Cornett, Adair, & Nofsinger, 2016, p. 154).
- Distinguished-level: Provide five correct responses.
- Proficient-level: “Classify the following transactions as taking place in the primary or secondary markets:
- Question 2:
- Proficient-level: “Classify the following financial instruments as money market securities or capital market securities:
- Federal Funds.
- Common Stock.
- Corporate Bonds.
- Mortgages.
- Negotiable Certificates of Deposit.
- U.S. Treasury Bills.
- U.S. Treasury Notes.
- U.S. Treasury Bonds.
- State and Government Bonds” (Cornett, Adair, & Nofsinger, 2016, p. 154).
- Distinguished-level: Provide nine correct responses.
- Proficient-level: “Classify the following financial instruments as money market securities or capital market securities:
- Question 3:
- Proficient-level: “What are the different types of financial institutions? Include a description of the main services offered by each” (Cornett, Adair, & Nofsinger, 2016, p. 154).
- Distinguished-level: Provide a definition of the term, liquidity.
- Question 4:
- Proficient-level: “List and provide the definitions of the six factors that determine the nominal interest rate on a security” (Cornett, Adair, & Nofsinger, 2016, p. 154).
- Distinguished-level: Identify the two factors common to all financial securities.
- Question 5:
- Proficient-level: Define the concept, term structure of interest rates. List and describe the three theories explaining the shape of the term structure of interest rates.
- Distinguished-level: Identify the slope of the most common yield curve for a U.S. Treasury security.
Write your responses in a Microsoft Word document and submit it as an attachment in the assignment area. Prior to submitting your assignment, review the Financial Markets and Institutions Scoring Guide to ensure you have met all of the requirements and as a self-assessment of your work.
Financial Markets and Institutions
Description Choose three (3) types of securities from any of the financial markets covered in the textbook during Weeks 1 through 7. Pick securities you would enjoy researching for this assignment. Write a five to six (5-6) page paper in which you: 1. Analyze the role financial markets play in creating economic wealth in the U.S. 2. Provide a general overview of each of the three (3) securities you chose. Be sure to include such information as name, company it represents (if applicable), pricing, and historical performance. 3. Assess the current risk return relationship of each of the three (3) securities. 4. Recommend one (1) strategy for maximizing return for the current risk return relationship identified for each of the three (3) securities. 5. Suggest how the Federal Reserve and its monetary policy affect each of the three (3) securities today. 6. Determine whether each of the three (3) securities is a good investment in the next twelve (12) months, five (5) years, and ten (10) years. Provide a rationale for each security with your determination. 7. Use at least six (6) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are: Describe the various types of financial markets and the types of transactions supported by each market in the U.S. and globally. Explain the operation of the Federal Reserve and describe how monetary policy is used in the U.S. and other countries to manage the economy Determine the valuation of various types of securities. Assess the risks in the various types of financial markets and develop strategies to manage the risks. Use technology and information resources to research issues in financial markets and institutions. Write clearly and concisely about financial markets and institutions using proper writing mechanics. The following additional outcomes may apply depending upon the student’s choice of securities: Develop strategies for the use of equity markets by investors and firms to meet stated financial objectives. Analyze the factors that affect interest rates and forecast interest rate changes.
Financial Markets and Institutions
Description Choose three (3) types of securities from any of the financial markets covered in the textbook during Weeks 1 through 7. Pick securities you would enjoy researching for this assignment. Write a five to six (5-6) page paper in which you: 1. Analyze the role financial markets play in creating economic wealth in the U.S. 2. Provide a general overview of each of the three (3) securities you chose. Be sure to include such information as name, company it represents (if applicable), pricing, and historical performance. 3. Assess the current risk return relationship of each of the three (3) securities. 4. Recommend one (1) strategy for maximizing return for the current risk return relationship identified for each of the three (3) securities. 5. Suggest how the Federal Reserve and its monetary policy affect each of the three (3) securities today. 6. Determine whether each of the three (3) securities is a good investment in the next twelve (12) months, five (5) years, and ten (10) years. Provide a rationale for each security with your determination. 7. Use at least six (6) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are: Describe the various types of financial markets and the types of transactions supported by each market in the U.S. and globally. Explain the operation of the Federal Reserve and describe how monetary policy is used in the U.S. and other countries to manage the economy Determine the valuation of various types of securities. Assess the risks in the various types of financial markets and develop strategies to manage the risks. Use technology and information resources to research issues in financial markets and institutions. Write clearly and concisely about financial markets and institutions using proper writing mechanics. The following additional outcomes may apply depending upon the student’s choice of securities: Develop strategies for the use of equity markets by investors and firms to meet stated financial objectives. Analyze the factors that affect interest rates and forecast interest rate changes.
