Task
This is Assignment 2
- Individual task
- You should prepare an executive memo and submit a document in Word format. Wordcount between 1500-2000.
- You should submit an Excel file used to perform your calculations.
Formalities:
- Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
- Font: Arial 12,5 pts.
- Text alignment: Justified.
Submission: Week (10) – Via Moodle (Turnitin). Sunday 18th April.
Weight: This task is a 40% of your total grade for this subject.
It assesses the following learning outcomes:
- Demonstrate a deep understanding of the role of financial markets and financial institutions
- Understand the primary classes of mutual funds available to investors and the benefits of different investment funds
- Understanding NAV calculations
- Understanding the relation between risk and return
Assignment:
- Assume you are an investment advisor. Your client is unsure what are the main benefits and reasons for investing in a Mutual Fund or in an index fund with an ETFs.
- Explain the main differences and similarities between each other
- Explain what are the main advantage and disadvantage of investing in mutual funds or ETFs
- Explain the main difference between active and passive management
- Go to https://www.morningstar.com
- What information does provide the Morningstar Style Box®?
- Morningstar assigns a Rating to each Mutual Fund. What are the criteria they use to assign this rating?
- Use the information provided above (style box and ratings) to choose 3 different mutual funds/ETFs (3 funds/ETFs per each portfolio) to prepare 3 portfolios for 3 different types of investors:
- Aggressive
- Moderate
- Conservative
- In half a page for each portfolio, explain:
- The rationale behind choosing the given funds/ETFs per each portfolio
- The criteria chosen to build each portfolio
- Follow up the prices for all 3 portfolios for a week. Calculate the return for each portfolio at the end of the week. Explain your results.
Rubrics
| Exceptional 90-100 | Good 80-89 | Fair 70-79 | Fail <70 | |
| Understanding (40%) | Student selects all key concepts, demonstrating an excellent understanding of the reading material and task. | Student selects some key concepts, demonstrating a good understanding of the reading material and task. | Student selects a few key concepts, demonstrating a fair understanding of the reading material and task although some concepts might be missing. | Student fails to select key concepts, demonstrating insufficient understanding of the reading material or task. |
| Calculation (25%) | Student demonstrates excellent ability to calculate and understand all key formulas & exercises. | Student demonstrates good ability to calculate and understand all key formulas & exercises. | Student demonstrates fair ability to calculate and understand all key formulas & exercises. | Student demonstrates insufficient ability to calculate and understand all key formulas & exercises. |
| Analysis (25%) | Student demonstrates an excellent ability to interpret statistics and the calculation results, as well as a highly critic approach | Student demonstrates an good ability to interpret statistics and the calculation results, as well as a good critic approach | Student demonstrates an fair ability to interpret statistics and the calculation results, as well as a fair critic approach | Student demonstrates an insufficient ability to interpret statistics and the calculation results, as well as a insufficient critic approach |
| Communication (10%) | Student communicates their ideas extremely clearly and concisely, in writing and orally. | Student communicates their ideas clearly and concisely, in writing and in public. | Student communicates their ideas with some clarity and concision, in writing and to some extent, in public. | Student fails to communicate their ideas clearly and concisely, in writing and/ or in public. |
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