answer the file attached as requested
Connecting the dots
Part A: Using examples, explain following “ in terms of how these are used for financial planning”.
(30 % of this assignment)
Asset allocation
Rule of 100
Dollar averaging
Fund expense ratios
Fund Standard deviation
Fund Beta
Portfolio beta
Part B: Planning problems using Excel
Mortgage payments : ( 10 % of this assignment)
Loan amount : $200,000
Interest rate (annual): 4.00 %
Term : 30 years
Calculate
monthly payments: ( Hint : Rate and number of periods should be adjusted for monthly)
Total interest amount over the life of the loan
In reference to (1, above). ( 10 % of this assignment)
Calculate PMT ( Monthly payments) if you want to pay of the above loan in 20 years
How much less interest will you pay over the life of the loan ( versus paying in 30 years)
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Fund A : | ||||||||||||||||||||
i. Current amount : $ 10,000 | ||||||||||||||||||||
ii. Historical performance , 10 year average : 6.5 % | ||||||||||||||||||||
iii. $2000 added ever year | ||||||||||||||||||||
Fund B : | ||||||||||||||||||||
i. Current amount : $ 10,000 | ||||||||||||||||||||
ii. Historical performance , 10 year average : 5 .5 % | ||||||||||||||||||||
iii. $2000 added ever year | ||||||||||||||||||||
Calculate ( using 10 year average performance) amount in each fund, and total portfolio at end of 10 years, 20 years and 30 years | ||||||||||||||||||||
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Jane is 40 years old and has $ 50,000 in her investment account equally spread . And she plans to put in $ 2000 every year in each of the two funds . (15 % of this grade)
Fund A :
Current amount : $ 25,000
Historical performance , 10 year average : 8.5 %
Fund beta : 1.2
$2000 added ever year
Fund B :
Current amount : $ 25,000
Historical performance , 10 year average : 4 .5 %
Fund beta : 0.5
$2000 added ever year
Using ten year average performance, calculate amount in each fund, and total portfolio at end of 10 years, 20 years and 30 years
Calculate portfolio beta at 10 year, 20 years and 30 years ( Hint : Portfolio beta is weighted average beta . Covered in Std deviation and Beta lectures…. recorded lecture for Beta)
Calculate Bond price; ( 10 % of this assignment )
Par : $1000
Yield maturity : 6.0%
Term left till maturity : 22 years
Coupon rate : 5 %
Bond Price : ?
In reference to above ( # 5) ( 5 % of this assignment)
Is the Bond being sold at discount or premium. Explain your answer.
Calculate Bond Yield to maturity RATE ( 10 % of this assignment) )
Bond Price : $ 1050
Par : $ 1000
Term to maturity 22 years
Coupon rate : 4 %
Yield to maturity Rate : ?