Assignment Purposes/Learning Outcomes: No. Course Learning Outcomes (CLOs) CLO3

Assignment Purposes/Learning Outcomes:
No.
Course Learning Outcomes (CLOs)
CLO3
Recognize investment opportunities.
CLO4
Explain the relationship between risk and return.
Assignment questions: Total grade – 10 points
1. Imagine you want to travel to US for your “graduation vacation” when you graduate from college in two years. How much money do you need to put aside right now to have $10,000 when you travel to US, assuming your bank’s savings account yields a 6 percent interest rate?(Show your calculations)(2 Marks)
2. Three cash flows of $3,125, $3,450, and $3,800 will be given to Ms. Marwa as a result of her investment. What will the future value of her investment cash flows be at the end of three years if she can earn 7.5 percent on any investment that she makes?(Show your calculations) (2Marks)
3. For computations of present or future values, the annual percentage rate (APR) is not the proper rate. Justify this assertion.(2 Marks)
4. Faisal invested 40% of his portfolio into an investment with an anticipated return of 12% and 60% of hisportfolio into an investment with an expected return of 20%. What is the expected return on Faisal’s portfolio?(2Marks)(Show your calculations)
5. Discuss the different types of corporate bonds. (2Marks)