In both cases, the bonds that were the most severely affected by the interest rate shocks were the longer-term maturities.
A g) Even Treasury bonds are risky, because short-term fluctuations in the interest rate can impact the value of the cash flows that they are to receive. The main difference between corporate bonds and Treasury bonds is that the latter are guaranteed by the government. Thus, they are considered risk free, in the sense that there is no default risk, only market risk. Corporate bonds, however, contain default risk. Therefore, it is important for the issuers of corporate bonds to understand that they must add in a risk premium to account for the default risk. The degree of default risk will be measured by bond rating agencies and that will determine the risk premium that the corporation must pay in order to raise funds in the bond market.

2. The three…...

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Works Cited

Bond yield calculator:  http://www.smartmoney.com/investing/bonds/bond-calculator-7917/ 

Treasury Yield Curve: http://www.bondsonline.com/Todays_Market/Treasury_Yield_Curve.php

No author. (2008) Advanced Bond Concepts: Term Structure of Interest Rates. Investopedia. Retrieved December 11, 2008 at  

Stocks and Bonds
eferences to the terms "stocks" and "bonds" are frequently heard in the mainstream media and throughout the investment literature, but the terms may not be completely understood by the general public. Therefore, making the distinction between the two financial instruments by providing current working definitions and typical examples of stocks and bonds is an important enterprise. To this end, this paper provides a review of the relevant literature to develop respective definitions and examples of the terms "stocks" and "bonds," followed by a summary of the research and significant findings in the conclusion.

In corporation law, the term "stock" is used in a variety of ways. For example, according to Black's Law Dictionary, "It may mean the capital or principal fund of a corporation formed by the contributions of subscribers or the sale of shares; aggregate of a certain number of shares severally owned by the members or…...

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References

Black's law dictionary. (1999). St. Paul, MN: West Publishing Co.

Englard, B. (2007). Schaum's outline of theory and problems of intermediate accounting II.

New York: McGraw-Hill.

Mayes, D. & Young, G. (1994). Improving the estimates of the UK capital stock. National Institute Economic Review, 147, 84-86.

Regardless of one's appetite for risk, it is essential that some diversification of assets is used to prevent 'losing' money by saving money in a bank account alone, although noninsured investments should not be concentrated on one area of the economy, to protect against potential losses.
Even in today's economic climate, investors should allocate some of their funds in safe, but higher-interest bearing sources. These might include certificates of deposits or CDs, which can be allocated into different accounts so the CDs mature at different times, to free up more of the saver's money. These safer investments may also include government bonds of stable governments and corporations, as well as preferred stock for companies that offer this option. Unlike CDs less than $250,000 in value, however, bonds and preferred stocks are not insured by the government.

The concept of the future value of money underlines the importance of saving in general.…...

Indian Stock and Bond Markets
Do you think an investment in the Indian stock market is a good long-term investment?

The Indian stock market has experienced a number of fluctuations over the past 20 years or so that would suggest that investors might want to adopt a "wait-and-see" approach before making the plunge into these financial waters. For example, Schmidt and Hersh emphasize that, "The history of the operation of the Indian stock market has been dotted with brokers often unable to meet their commitments, allegations and proved instances of insider trading, and deliberate manipulation of stock prices by bears and bulls" (2000, p. 131). The prices for stocks listed on the Indian stock have experienced a number of highs and lows, with the most significant boom taking place during the period 1993 to 1995; however, although there have been some spikes, there has been a downward trend experienced since that…...

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References

Kumar, R. (2007). Economic growth and volatility in Indian stock market: a critical analysis.

South Asian Journal of Management, 14(2), 47-48.

Schmidt, J.D. & Hersh, J. (2000). Globalization and social change. London: Routledge.

Sen, P., Bahel, N. & Ranjan, S. (2003, July). Developing the Indian debt capital markets:

For example, if the Fed sees inflation as a risk going forward, the market will place a weighting on that statement, allocating some form of increased interest rate to the future cash flows.
At the time of course, the exact implications of the Fed's comments are unknown. They imply that rates may move in one direction or another, but they are not an actual movement and the Fed reserves the right to change its mind before it meets again. The bond market is thus working with imperfect information. This can lead to general price movements but of unknown quantity. Over time, a reasonable correlation can be established, such as the elasticity of bond prices in relation to, for example, strong warnings from the Fed about inflation. Such a correlation can be drawn with a large enough sample size that it can be used in bond prices.

Overall, though, the exercise still…...

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Works Cited:

No author. (2009). Advanced Bond Concepts: Bond Pricing. Investopedia. Retrieved April 29, 2009 from  http://www.investopedia.com /university/advancedbond/advancedbond2.asp

No author. (2009). The Grand Illusion. The Economist. Retrieved April 29, 2009 from  http://www.economist.com/finance/displaystory.cfm?story_id=13240822 

Heakal, Reem. (2009). Forces Behind Interest Rates. Investopedia. Retrieved April 29, 2009 from

Raising Corporate Capital Issues
It appears fairly clear that the most advantageous means of raising capital for a corporation is to sell common stock. However, it is critical to realize that there are other things that a corporation must do in addition to selling common stock to make this method provide the degree of efficacy that the corporation desires. The reason that selling common stock can help to raise capital for the corporation is that it is possible to get many different people to invest in the company through this means. However, these individuals will tend to do so in greater numbers and in ways that continue to benefit the corporation if the company itself excels. Specifically, the company must simultaneously focus on its core business and keep abreast of its competition so that it can continue to generate revenue and, hopefully, provide the sort of profit margins that are viewed…...

Trump's Tax Plan
Donald Trump's stance on trade -- namely, that cutting corporate taxes will incentivize companies to stay in the U.S. (as will a tariff on the imported goods of offshoring companies) -- is one that is denounced by his opponent Hillary Clinton. Clinton argues that the tax break proposed by Trump will only benefit the 1% and that his plan to place a tariff on companies that export labor only to turn around and import their products would lead to massive job loss. Trump's rationale is that by cutting the corporate tax rate, which is among the highest in the world, it would allow companies to keep labor in the U.S. as they will not have to chase margins by employing cheaper labor in foreign countries. This would be the positive incentive. Adding the tax on U.S. companies that manufacture abroad and sell in the U.S. would serve as…...

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Works Cited

Durden, Tyler. "Trump slams Yellen." Zerohedge, 2016. Web. 7 Oct 2016.

 http://www.zerohedge.com/news/2016-09-05/trump-slams-yellen-fed-has-created-stock-bubble-and-false-economy-boost-obama 

Hersh, Adam; Gurwitz, Ethan. "Offshoring work is taking a toll on the U.S. economy."

Center for American Progress, 2014. Web. 7 Oct 2016.  https://www.americanprogress.org/issues/economy/news/2014/07/30/94864/offshoring-work-is-taking-a-toll-on-the-u-s-economy/

Bond-buyers are also traditionally older and might have been more leery about investing in a new technology such as the Internet during the 1990s.
The choice of these companies to pay a higher rate of return to compensate for the greater risk would have defeated the purpose of the corporation issuing bonds in the first place, as what makes the issuing of bonds so attractive is that the interest rates on bonds that corporations must pay investors are traditionally lower than rates for most other types of borrowing ("How Corporations Raise Capital," U.S. Department of State, 2007). For young, untried companies like the Internet companies of the 1990s this would not necessarily be the case, thus it made more sense to generate revenue through issuing common stock, as if the company faltered for a time, this would not have to be repaid, and buyers of stock were the right, less-risk…...

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Works Cited

Comparing Stocks, Bonds, and Cash Equivalents." American Funds. 6 Jul 2007.  http://myretirement.retire.americanfunds.com/planning/investing/comparing.htm 

How Corporations Raise Capital." U.S. Department of State." About.com. Jul 6, 2007.  http://economics.about.com/od/smallbigbusiness/a/corp_capital.htm

50) to 2097 -- the price of this bond is of $58 (Yahoo Finance, 2009).
Despite their past low popularity, the investors are now beginning to seek more vividly the Ford preferred stock (F-PF) and this is generally explained by the fact that the popularity of the common stock has suffered demises. The company officials have decided to allow owners of common stocks to exchange them with preferred stocks and vice versa, in order to increase investor satisfaction. The preferred stock is being traded at a value of $38.86. Preferred stocks are among the riskiest investments and the specialized advice is that they be kept for long periods of time, but in small amounts. Additionally, it is necessary to diversify the portfolio and the preferred stock should not make up more than one percent (Neubert, 2007).

eferences:

Neubert, D., 2007, Ford Preferred (F-PS): Used Only with Diversification, The Panelist, http://thepanelist.com/Neubert%27s_Trades/Neuberts_Trades/_20070805502/last accessed on July…...

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References:

Neubert, D., 2007, Ford Preferred (F-PS): Used Only with Diversification, The Panelist, accessed on July 8, 2009http://thepanelist.com/Neubert%27s_Trades/Neuberts_Trades/_20070805502/last

2009, Bond Screener at Yahoo Finance, last accessed on July 8, 2009http://reports.finance.yahoo.com/z1?is=ford

2009, Investopedia,   last accessed on July 8, 2009http://www.investopedia.com 

It is expected that the bond will mirror the performance of the S & P. 500. ("Transaction History," 2010)
November 24, 2010

On November 24th several more new purchases would take place to include: General Motors, erkshire Hathaway, the Fidelity Immediate Government Fund and the Strategic Advisors Income Fund.

Stocks

General Motors was selected, because it could help to provide the portfolio with above average growth. The results were that that stock would see an increase of 1.4%. ("Transaction History," 2010)

erkshire Hathaway was purchased to provide the portfolio with stability and diversification. This investment is expected to outperform the major market averages. The results were up .96%.( "Transaction History," 2010)

Mutual Funds

The Fidelity Intermediate Government Fund was selected because of their focus on medium term Treasury investments. This is expected to underperform the market averages. The results were that the position declined by 2.55%. ("Transaction History," 2010)

The Strategic Advisors Income Fund was selected to…...

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Bibliography

Account Details. (2010). Stock Trak. Retrieved from:  http://www.stocktrak.com/private/account/summary.aspx 

Ford Posts 68% Rise in Third Quarter Income. (2010). MSNBC. Retrieved from:  http://www.msnbc.msn.com/id/39845528/ns/business-autos/ 

Transaction History. (2010). Stock Trak. Retrieved from:  http://www.stocktrak.com/private/account/transactionhistory.aspx 

Kavilanliz, P. (2010). Black Friday. CNN Money. Retrieved from:  http://money.cnn.com/2010/11/27/news/economy/Black_friday_2010_sales/

Since inception, the Amex Composite Index has shown an increase of 57.3%, as compared to the NASDAQ Composite's gain of 26.6%, the S&P 500's gain of 7.1%, and the NYSE composite's gain of 14.3% (American Stock Exchange).
Values and volumes of stocks and options at the AMEX are significant. Closing values as of 10/11/2004 at 5:07 PM ET show significant activity. As of this date, the total volume was 44,288,030, with 1,359 block trades. Total options volume was 576,653, and bond volume was 102,000 (American Stock Exchange).

Like other stock exchanges, the AMEX is run by a number of officials. Officers of the AMEX include Chairman and Chief Executive Officer SALVATOE F. SODANO, the President Peter Quick, Executive Vice President alph . afaniello, and Chief Financial Officer and Controller MICHAEL T. D'EMIC. The AMEX also has a Board of Governors, trustees, a nominating committee, exchange officials, floor officials and a disciplinary…...

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References

American Stock Exchange.

Welcome to the American Stock Exchange, 2004. 11 October 2004.  http://www.amex.com/ 

CCH Incorporated. American Stock Exchange (AMEX), 2004. 11 October 2004. http://wallstreet.cch.com/AmericanStockExchangeAMEX/

Investorwords.com. American Stock Exchange. WebFinance, Inc., 2004. 11 October 2004.  http://www.investorwords.com/197/American_Stock_Exchange.html

Finance Discussion
The market for bonds is not always liquid, but the same bond should buy/sell at the same price, if at the same time. If not, this will create an arbitrage opportunity and that arbitrage will align the prices on the different markets where the bond was priced differently. However, at different times, the price can change, based on the underlying factors that affect bond prices (Feldhutter, 2012). One such factor is time. Each bond has a time value, which represents the present value of the future cash flows, and the risk that interest rates will change in that time. Thus, the same bond will see its price change, the closer it gets to maturity, even when the only thing that has changed is the time.

Other changes will also affect bond prices. A change in interest rates will affect the opportunity cost of owning a given bond, leading to a…...

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References

Diffen (2015). Stocks vs. bonds. Diffen.com. Retrieved April 11, 2015 from  http://www.diffen.com/difference/Bond_vs_Stock 

Feldhutter, P. (2012). The same bond at different prices: identifying search frictions and selling pressures.

Investopedia (2015). Why do interest rates tend to have an inverse relationship with bond prices? Investopedia. Retrieved April 11, 2015 from  http://www.investopedia.com /ask/answers/04/031904.asp

Morrison, R. (2012). Preferred shares an alternative to bonds, stocks. Financial Post. Retrieved April 11, 2015 from  http://business.financialpost.com/investing/etfs/preferred-shares-an-attractive-alternative-to-bonds-stocks

Apple: Borrower Analysis
The size of the loan that Apple (AAPL) is procuring is $6.5 billion dollars in corporate bonds (Colt, 2015) with the intention of raising another $1.6 billion through the sale of Australian currency bonds in the form of seven-year notes (Purvis, 2015). The intention of the loan is to lift share holder value through the increase of dividend payments while avoiding hefty tax payments by repatriating its stockpile of cash ($145 billion to be exact) held in offshore accounts (Ehrman, 2013).

Thus, this transaction is useful to Apple because it allows the company to maintain its significant cash reserves and to boost its stock price by giving investors greater incentive to buy. Some critics might argue that the loan does nothing to really boost the company's fundamentals (in terms of development projects) but in an age where fundamentals are increasingly insignificant (which is what happens when QE to infinity…...

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References

Colt, S. (2015). Apple just took out a $6.5 billion loan even though it's sitting on $178

billion in cash. Business Insider. Retrieved from  http://www.businessinsider.com/why-apple-raised-65-billion-in-debt-2015-2 

Ehrman, D. (2013). Does Apple need a loan for billions? Motley Fool. Retrieved fom  http://www.fool.com/investing/general/2013/04/27/does-apple-need-a-loan-for-billions.aspx 

Purvis, B. (2015). Apple raises $1.6 billion in record corporate bond deal. Bloomberg.

Investment Strategy
When the market crashes, turns bearish, or severely corrects, investors not only lose objective things such as money, they also lose the sustaining functions of which the investing process (and/or money, which may psychologically represent self-esteem, independence, power, etc.) has been the source. That means, in addition to objectively not having the money to buy that new house or car, self-esteem drops, and the investors capacity to calm themselves down is diminished, motivation wanes, confidence is shaken, and vitality ebbs. A down market represents an injury to our total sense of self and all the functions that sustain it. In a general way it represents a hope or fantasy lost.

For the young investor, with a large amount of earning power remaining in his life, the ups and downs of the market are small obstacles to the long-term objective of amassing a financial nest egg on which to retire. However,…...

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References

Block Sandra. Stable value funds low-cost, reliable investments., USA Today, 11-30-1998, pp 20A.

McEwen David, Best to find out your risk tolerance., The Daily News (Taranaki, New Zealand), 10-08-2001, pp 6.

Luke, Robert. Staff, Step 1: Investors should evaluate tolerance for risk Finance professor's quiz helps determine the asset allocation each individual is most comfortable with.., The Atlanta Journal and Constitution, 04-03-2000, pp S26.

Finance
Question 1.a) Bond ratings encompass a wide range of elements related to the credit risk of the firm. Moody's notes that bond ratings include elements of default probability, loss severity, "financial strength" and "transition risk" (Cantor & Fons, 1999). The authors note that within the same sector, bonds of the same rating tend to be comparable both with respect to overall credit quality and specific credit quality characteristics. Over different segments of the bond market, this is not necessarily the case. Bond ratings tend to take in factors like the balance sheet strength of the firm, as well as the expected loss in the event of a default. Thus, the type of assets that the firm holds is an important characteristic. The transition risk reflects the likelihood that the firm will experience outright default without transitioning down through the different risk categories. Firms that are almost assuredly going to transition…...

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Works Cited:

Cantor, R. & Fons, J. (1999). Rating methodology: The evolving meaning of Moody's bond ratings. Moody's. Retrieved April 27, 2012 from http://www.moodys.com/sites/products/AboutMoodysRatingsAttachments/2000400000300541.pdf?frameOfRef=corporate

Investopedia. (2012). Net present value. Investopedia. Retrieved April 27, 2012 from  

Original Thesis Statement:

Investing in diversified asset classes with a long-term horizon will provide superior returns while mitigating risk.

Revised Thesis Argument:

Introduction:

In today's increasingly complex and volatile financial markets, investors face a daunting task when it comes to making informed investment decisions. The traditional approach of investing solely in stocks and bonds has become less effective due to low interest rates and market fluctuations. This has led to the growing popularity of alternative asset classes, such as real estate, commodities, and private equity.

Thesis:

I argue that a diversified portfolio that includes both traditional and alternative asset classes, and is held over a long-term....

1. The choice between stocks and bonds in an investment portfolio can significantly impact the overall risk and return profile of the portfolio.

2. While stocks have historically provided higher returns over the long term compared to bonds, they also come with higher volatility and risk.

3. Bonds, on the other hand, are generally considered safer investments due to their fixed income nature, providing a more stable source of returns but with lower potential for growth.

4. The allocation between stocks and bonds in a portfolio plays a crucial role in determining the portfolios risk-adjusted return, known as the Sharpe....

1.Investing in stocks and bonds has a significant impact on investment portfolios, with each offering distinct advantages and risks that shape the portfolio's overall performance, diversification, and risk tolerance.

2.Stocks, representing ownership shares in companies, offer higher potential returns but also carry greater risk, making them suitable for investors with higher risk tolerance and longer investment horizons seeking capital growth.

3.Bonds, representing loans made to companies or governments, provide lower returns but lower risk, making them more attractive to investors seeking stability, income generation, or capital preservation.

4.Diversification between stocks and bonds is crucial for reducing overall portfolio risk, as....

Industrialism has greatly impacted societies and economies in the modern world in several ways 1. Economic growth Industrialism has led to increased production and productivity, which has contributed to economic growth in many countries. The development of industries such as manufacturing, mining, and technology has created jobs and boosted GDP. 2. Urbanization Industrialism has led to mass urbanization as people have migrated from rural areas to cities in search of work in factories and other industrial settings. This has transformed societies by creating densely populated urban areas and new social structures. 3. Wealth disparity The rise of industrialism has also....