Assignment: Investment Analysis
To complete this assignment, refer to the scenario from Assignment: Investment Selection. Scenario:
Imagine that you are a potential investor researching a U.S. investment of your choice. Your choice can be any investment that is highly marketable, which means that you must be able to sell it at a market price very easily. Publically traded stock, corporate bonds, government bonds, real estate, mutual funds, and derivatives are all examples of highly marketable investments.
You will be required to collect financial statements and /or relevant financial information that detail(s) the past three years (fiscal or calendar) of the chosen investment. (These statements can usually be located within the organization's Website under "investor information" or something similar. Many times, these statements can also be found on Yahoo! Finance, Google Finance, MSN Money, or Hoovers.)
You will also be required to research your chosen investment's price for the past five years, as well as a related market index for this investment for the past five years. An example of an applicable market index is the Standard & Poor's Stock Market Index, commonly called the S&P 500.
Note: Include any financial statements or relevant financial information in an appendix.
Write a four to six page paper in which you:
1. Provide a detailed overview of the selected U.S. investment indicating the rationale for your selection.
2. Select five financial ratios, then analyze the past three years of financial data for the investment (obtain data from the financial statements or the equivalent).
3. Analyze the price of the investment to its market index for the past five years.
4. Create a trend line that depicts the price movement for the investment against the market index movement using elements of Microsoft Office, such as Excel, Visio, MS Project, or one of their equivalents such as Open Project, Dia, and OpenOffice, as appropriate. Note: The graphically depicted solution is not included in the required page length.
5. Determine the type of person who would be the best candidate for the chosen investment (e.g., the risk adverse investor, an aggressive investor, etc.). Provide a rationale for why this investment is a solid one, and support the assertion that someone should invest in this stock.
6. Use at least five quality academic resources in this assignment. Note: Wikipedia and other Websites to not qualify as academic resources.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
The specific course learning outcomes associated with this assignment are:
• Examine common debt and equity securities, and analyze the relative risks and returns associated with each.
• Analyze how the securities business works through stockbrokers and investment bankers using the physical exchanges, network exchanges, and OTC markets.
• Perform and interpret basic security analyses using indexes, averages, and various technical methods, as well as compounding, discounting, and forecasting.
• Propose ways to apply various strategies in the management of financial investment portfolios in order to optimize profits (and minimize taxes) within acceptable risks.
• Find and utilize sources of pertinent investing information on a company, its industry, the economy as a whole, and the international environment to analyze investment potential.
• Examine the differences between various investments such as options, convertibles, warrants, rights, and commodities.
• Illustrate how to use hybrid and derivative instruments such as convertibles, warrants, rights, options, and futures contracts in investment strategies.
• Use technology and information resources to research issues in investments.
• Write clearly and concisely about investments using proper writing mechanics.