Assignment
For this part of the course project, you will demonstrate your ability to illustrate the functions and impact of banking and monetary institutions and to provide a recommendation guided by them.
In your role as a financial advisor at Eagle Consulting, you are performing a complete financial analysis for Melinda Jacobsen, a successful business executive who is retiring in 10 years. A portion of this analysis covers the question of whether Ms. Jacobsen should refinance her home in order to provide additional funding for a long-term retirement investment.
Because "above and beyond" customer service is critical to the success of Eagle Consulting, in addition to providing a recommendation on possible refinancing options, you want to provide Ms. Jacobsen with some background information on the Federal Reserve and how it affects interest rates.
Using the information about Melinda Jacobsen's goals and the information you uncover during your research, you will write a recommendation document that explains the Federal Reserve, how the Federal Reserve affects interest rates, possible loan options, and a final recommendation for what loan she should choose.
To complete this assignment, do the following:
1. Download and read the Eagle Consulting Info Sheet.
2. Write a 3-page recommendation structured in three parts:
1. Explanation of how the Federal Reserve impacts interest rates (1.5 pages)
2. Explanation of loan options (1 page + Excel chart)
Recommendation for a loan (.5 page)
See below for details on each of the three parts.
Part 1: Federal Reserve's Impact on Interest Rates
1. Discuss how the Federal Reserve uses the following tools to impact interest rates and the economy:
1. Open market operations
2. Discount rate
3. Reserve requirements
Part 2: Loan Options
1. Research the current mortgage interest rates for a 10-year, 15-year, 20-year, and 30-year loan.
2. In Excel, graph the interest rates using years as the X-axis and interest rates as the Y-axis.
3. Using the graph, describe the following:
1. Type of yield curve presented in the graph
2. Relationship between interest rates and number of years to maturity
3. Impact that risk and inflation has on the interest rates as the maturity date is lengthened
Part 3: Recommendation
1. Make a recommendation to Ms. Jacobsen on what mortgage loan to take (10-year, 15-year, 20-year, or 30-year).
2. Justify your recommendation.
Introduction to Eagle Consulting and Financial Services, Inc.
Eagle Consulting and Financial Services is a company offering a range of financial advisory and consulting services to individuals and business. Eagle focuses on solving clients' most challenging issues with a cross-disciplinary approach that encompasses everything from enterprise improvement and financial advisory services to information management, leadership and organizational effectiveness, and turnaround and restructuring.
Eagle's vast experience and specialized expertise enables the company to serve a wide range of businesses and industries, whether they are healthy, challenged, or distressed, as well as business owners and other individuals.
Services for Individuals
The Wealth Management team at Eagle works with individuals to deliver services and solutions that help build, preserve, and manage wealth. The mission of every financial advisor is to understand the aspirations of each and every client and help them achieve their goals.
Services provided to individual investors include:
• Wealth planning
• Investment management
• Cash management
• Lending solutions
• Estate planning
Services for Businesses
The Business Advisory team specializes in a wide array of enterprise-wide solutions. The team tailors their services to the specific needs of the client, whether addressing an isolated business challenge; integrating resources across departments, divisions or continents; or serving in interim leadership roles to steer a firm through a period of change. The Eagle suite of services address all aspects of the business life cycle to help clients overcome complex operational and financial issues, uncover new opportunities, minimize risk, and maximize value.
Services provided to businesses include:
• Enterprise improvement
• Financial advisory services
• Information management
• Leadership and organizational effectives
• Turnaround and restructuring.