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Complete course guide available here 
https://bitly.com/1rubS7F 
This work of BUS 405 Week 1 Discussion Question 2 Money 
Market Funds comprises: 
From Chapter 4, complete Problem 4: The Aqua Liquid Assets 
Money Market Mutual Fund has a NAV of $1 per share. 
During the year, the assets held by this fund appreciated by 
2.5 percent. If you had invested $50,000 in this fund at the 
start of the year, how many shares would you own at the end 
of the year? What will the NAV of this fund be at the end of 
the year? Why? Remember to complete all parts of the 
question, show your work, and report the results of your 
analysis. 
Business - General Business 
Week One 
Week 1 – DQ1 - Blume’s Formula, Allocation, and Selection 
From Chapter 1, answer Concept Question 5: What is Blume’s 
formula? When would you want to use it in practice? Also, 
from Chapter 2, answer Concept Question 4: What is the 
difference between asset allocation and security selection? 
Remember to complete all parts of the questions and 
support your answers with examples from the text and other 
resources. 
Week 1 – DQ2 - Money Market Funds 
From Chapter 4, complete Problem 4: The Aqua Liquid Assets
Money Market Mutual Fund has a NAV of $1 per share. 
During the year, the assets held by this fund appreciated by 
2.5 percent. If you had invested $50,000 in this fund at the 
start of the year, how many shares would you own at the end 
of the year? What will the NAV of this fund be at the end of 
the year? Why? Remember to complete all parts of the 
question, show your work, and report the results of your 
analysis. 
Assignment 
Week 1- Assignment - Annualized Returns – Chapter 3 
problem 18 
Complete problem 18 in Chapter 3 (shown below) and submit 
to the instructor. Show your work to find the annualized 
return for each of the listed share prices. Write a 100 word 
analysis of the process to calculate these annualized returns. 
Suppose you have $28,000 to invest. You’re considering 
Miller-Moore Equine Enterprises (MMEE), which is currently 
selling for $40 per share. You also notice that a call option 
with a $40 strike price and six months to maturity is 
available. The premium is $4.00. MMEE pays no dividends. 
What is your annualized return from these two investments 
if, in six months, MMEE is selling for $48 per share? What 
about $36 per share? 
Week Two 
Readings 
Chapter 5: The Stock Market 
Chapter 6: Common Stock Valuation 
Chapter 7: Stock Price Behavior and Market Efficiency 
Chapter 8: Behavioral Finance and the Psychology of 
Investing 
Discussions
Week 2 – DQ1 - Primary and Secondary Markets 
Complete Concept Question 1 from Chapter 5: If you were to 
visit your local Chevrolet retailer, there is both a primary and 
a secondary market in action. Explain. Is the Chevy retailer a 
dealer or a broker? Remember to complete all parts of the 
question and support your answers with examples from the 
text and other resources. 
Week 2 – DQ2 - Contrarian Investing 
Complete Concept Question 9 from Chapter 8: What does it 
mean to be a contrarian investor? How would a contrarian 
investor use technical analysis? Post your answers to the 
discussion board. Remember to complete all parts of the 
question and support your answers with examples from the 
text and other resources. 
Assignment 
Week 2 – Assignment - Abbott Laboratories Problem 
After reading the Value Line figures and information on 
Abbott Laboratories in the Questions and Problems section 
of Chapter 6 (just before Problem 27), complete Problems 27, 
28, 29, 30, and 31 and submit to your instructor. Show your 
calculations and in your response to problem 31 write a 100 
to 200 word defense of your position as to the value of 
Abbott Laboratories stock at its current price of $50 per 
share. 
27. What is the sustainable growth rate and required return 
for Abbott Laboratories? Using these values, calculate the 
2010 share price of Abbott Laboratories Industries stock 
according to the constant dividend growth model. 
28. Using the P/E, P/CF, and P/S ratios, estimate the 2010
share price for Abbott Laboratories. Use the average stock 
price each year to calculate the price ratios. 
29. Assume the sustainable growth rate and required return 
you calculated in Problem 27 are valid. Use the clean surplus 
relationship to calculate the share price for Abbott 
Laboratories with the residual income model. 
30. Use the information from the previous problem and 
calculate the stock price with the clean surplus dividend. Do 
you get the same stock price as in the previous problem? 
Why or why not? 
31. Given your answers in the previous questions, do you feel 
Abbott Laboratories is overvalued or undervalued at its 
current price of around $50? At what price do you feel the 
stock should sell? 
Week Three 
Discussions 
Week 3 – DQ1 - Forward Interest Rates 
Complete Problem 16 from the Questions and Problems 
section of Chapter 9: According to the pure expectations 
theory of interest rates, how much do you expect to pay for a 
one-year STRIPS on February 15, 2011? What is the 
corresponding implied forward rate? How does your answer 
compare to the current yield on a one-year STRIPS? What 
does this tell you about the relationship between implied 
forward rates, the shape of the zero coupon yield curve, and 
market expectations about future spot interest rates? 
Remember to complete all parts of the questions, and report 
the results of your analysis. 
Week 3 – DQ2 - Bond Prices versus Yields
Complete Concept Question 9 of Chapter 10: (a) What is the 
relationship between the price of a bond and its YTM? (b) 
Explain why some bonds sell at a premium to par value, and 
other bonds sell at a discount. What do you know about the 
relationship between the coupon rate and the YTM for 
premium bonds? What about discount bonds? For bonds 
selling at par value? (c) What is the relationship between the 
current yield and YTM for premium bonds? For discount 
bonds? For bonds selling at par value? Remember to 
complete all parts of the questions, and report the results of 
your analysis. 
Assignment 
Week 3 – Assignment – Bootstrapping Chapter 10 Problem 
31 
Complete problem 31 of Chapter 10 (shown below), and 
submit to your instructor. Show your calculations and the 
algebraic manipulation of the price equation for the bond. In 
addition to solving the problem, write a 100 to 200 word 
essay on the term structure of fixed income securities. 
One method used to obtain an estimate of the term structure 
of interest rates is called bootstrapping. Suppose you have a 
one-year zero coupon bond with a rate of r1 and a two-year 
bond with an annual coupon payment of C. To bootstrap the 
two-year rate, you can set up the following equation for the 
price (P) of the coupon bond: /(1+r_1 )+(C_2+Par 
value)/(1+r_2 )^2 
Because you can observe all of the variables except r2, the 
spot rate for two years, you can solve for this interest rate. 
Suppose there is a zero coupon bond with one year to 
maturity that ... 
https://bitly.com/1rubS7F

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Bus 405 week 1 dq2 money market funds

  • 1. Complete course guide available here https://bitly.com/1rubS7F This work of BUS 405 Week 1 Discussion Question 2 Money Market Funds comprises: From Chapter 4, complete Problem 4: The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 2.5 percent. If you had invested $50,000 in this fund at the start of the year, how many shares would you own at the end of the year? What will the NAV of this fund be at the end of the year? Why? Remember to complete all parts of the question, show your work, and report the results of your analysis. Business - General Business Week One Week 1 – DQ1 - Blume’s Formula, Allocation, and Selection From Chapter 1, answer Concept Question 5: What is Blume’s formula? When would you want to use it in practice? Also, from Chapter 2, answer Concept Question 4: What is the difference between asset allocation and security selection? Remember to complete all parts of the questions and support your answers with examples from the text and other resources. Week 1 – DQ2 - Money Market Funds From Chapter 4, complete Problem 4: The Aqua Liquid Assets
  • 2. Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 2.5 percent. If you had invested $50,000 in this fund at the start of the year, how many shares would you own at the end of the year? What will the NAV of this fund be at the end of the year? Why? Remember to complete all parts of the question, show your work, and report the results of your analysis. Assignment Week 1- Assignment - Annualized Returns – Chapter 3 problem 18 Complete problem 18 in Chapter 3 (shown below) and submit to the instructor. Show your work to find the annualized return for each of the listed share prices. Write a 100 word analysis of the process to calculate these annualized returns. Suppose you have $28,000 to invest. You’re considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $40 per share. You also notice that a call option with a $40 strike price and six months to maturity is available. The premium is $4.00. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $48 per share? What about $36 per share? Week Two Readings Chapter 5: The Stock Market Chapter 6: Common Stock Valuation Chapter 7: Stock Price Behavior and Market Efficiency Chapter 8: Behavioral Finance and the Psychology of Investing Discussions
  • 3. Week 2 – DQ1 - Primary and Secondary Markets Complete Concept Question 1 from Chapter 5: If you were to visit your local Chevrolet retailer, there is both a primary and a secondary market in action. Explain. Is the Chevy retailer a dealer or a broker? Remember to complete all parts of the question and support your answers with examples from the text and other resources. Week 2 – DQ2 - Contrarian Investing Complete Concept Question 9 from Chapter 8: What does it mean to be a contrarian investor? How would a contrarian investor use technical analysis? Post your answers to the discussion board. Remember to complete all parts of the question and support your answers with examples from the text and other resources. Assignment Week 2 – Assignment - Abbott Laboratories Problem After reading the Value Line figures and information on Abbott Laboratories in the Questions and Problems section of Chapter 6 (just before Problem 27), complete Problems 27, 28, 29, 30, and 31 and submit to your instructor. Show your calculations and in your response to problem 31 write a 100 to 200 word defense of your position as to the value of Abbott Laboratories stock at its current price of $50 per share. 27. What is the sustainable growth rate and required return for Abbott Laboratories? Using these values, calculate the 2010 share price of Abbott Laboratories Industries stock according to the constant dividend growth model. 28. Using the P/E, P/CF, and P/S ratios, estimate the 2010
  • 4. share price for Abbott Laboratories. Use the average stock price each year to calculate the price ratios. 29. Assume the sustainable growth rate and required return you calculated in Problem 27 are valid. Use the clean surplus relationship to calculate the share price for Abbott Laboratories with the residual income model. 30. Use the information from the previous problem and calculate the stock price with the clean surplus dividend. Do you get the same stock price as in the previous problem? Why or why not? 31. Given your answers in the previous questions, do you feel Abbott Laboratories is overvalued or undervalued at its current price of around $50? At what price do you feel the stock should sell? Week Three Discussions Week 3 – DQ1 - Forward Interest Rates Complete Problem 16 from the Questions and Problems section of Chapter 9: According to the pure expectations theory of interest rates, how much do you expect to pay for a one-year STRIPS on February 15, 2011? What is the corresponding implied forward rate? How does your answer compare to the current yield on a one-year STRIPS? What does this tell you about the relationship between implied forward rates, the shape of the zero coupon yield curve, and market expectations about future spot interest rates? Remember to complete all parts of the questions, and report the results of your analysis. Week 3 – DQ2 - Bond Prices versus Yields
  • 5. Complete Concept Question 9 of Chapter 10: (a) What is the relationship between the price of a bond and its YTM? (b) Explain why some bonds sell at a premium to par value, and other bonds sell at a discount. What do you know about the relationship between the coupon rate and the YTM for premium bonds? What about discount bonds? For bonds selling at par value? (c) What is the relationship between the current yield and YTM for premium bonds? For discount bonds? For bonds selling at par value? Remember to complete all parts of the questions, and report the results of your analysis. Assignment Week 3 – Assignment – Bootstrapping Chapter 10 Problem 31 Complete problem 31 of Chapter 10 (shown below), and submit to your instructor. Show your calculations and the algebraic manipulation of the price equation for the bond. In addition to solving the problem, write a 100 to 200 word essay on the term structure of fixed income securities. One method used to obtain an estimate of the term structure of interest rates is called bootstrapping. Suppose you have a one-year zero coupon bond with a rate of r1 and a two-year bond with an annual coupon payment of C. To bootstrap the two-year rate, you can set up the following equation for the price (P) of the coupon bond: /(1+r_1 )+(C_2+Par value)/(1+r_2 )^2 Because you can observe all of the variables except r2, the spot rate for two years, you can solve for this interest rate. Suppose there is a zero coupon bond with one year to maturity that ... https://bitly.com/1rubS7F