Expert answer:InstructionsFor this milestone, you will discuss the potential risks and benefits associated with each of the derivative instruments that you are recommending to address the needs of the problem within the case study scenario—including how these risks and benefits can have an impact on the company’s return. You will examine the external and internal factors (and the potential impact of these factors) that the company will need to consider in its investment decisions. In addition, you will also calculate the potential price impact of the derivative instruments that you are recommending. These calculations will be included in an Excel spreadsheet, which will serve as an appendix to your final portfolio proposal. To complete this assignment, review the Final Project One Milestone Two Guidelines and Rubric document.
fin_670_final_project_one_milestone_two_guidelines_and_rubric.pdf
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FIN 670 Final Project I Milestone Two Guidelines and Rubric
Risks and Benefits and Price Impact
Overview: For this first milestone, due in Module Five, you will discuss the potential risks and benefits associated with each of the derivative instruments that
you are recommending to address the needs of the problem within the case study scenario—including how these risks and benefits can have an impact on the
company’s return. You will examine the external and internal factors (and the potential impact of these factors) that the company will need to consider in its
investment decisions. In addition, you will also calculate the potential price impact of the derivative instruments that you are recommending. These calculations
will be included in an Excel spreadsheet, which will serve as an appendix to your final portfolio proposal.
Prompt: First, review the case that you have chosen for your final project, as well as the accompanying spreadsheet for the case, and in a 2- to 3-page paper
address the following critical elements:
II.
III.
Risks and Benefits
A. Discuss potential risks and benefits associated with each instrument and how those risks could have an impact on return.
B. Assess the impacts of multiple extrinsic and intrinsic factors that the company will want to consider based on how they influence value and
price.
Price Impact (Spreadsheet Appendix)
A. Calculate the potential price impact of extrinsic and intrinsic factors, and expected mitigated risk value of recommended derivative instruments.
Present this information in your spreadsheet, and include it as an appendix.
Refer to the Module Five resources and other course resources to support your responses. Be sure to apply instructor feedback on this milestone to your final
project.
Rubric
Guidelines for Submission: This milestone should be submitted as a Word document, 2–3 pages in length, double-spaced, using 12-point Times New Roman
font, one-inch margins, and the latest edition of the APA manual for formatting and citations.
Critical Elements
Risks and Benefits
Proficient (100%)
Discusses potential risks and benefits
associated with each instrument and
how those risks could have an impact
on return
Extrinsic and Intrinsic
Factors
Assesses the impacts of multiple
extrinsic and intrinsic factors that the
company will want to consider based
how they influence value and price
Needs Improvement (75%)
Discusses potential risks and benefits
associated with each instrument, but
explanation of benefits and of how risks
could have an impact on return is
lacking in detail
Assesses extrinsic and intrinsic factors
that the company will want to consider
in its investment decisions, but factors
identified are illogical
Not Evident (0%)
Does not discuss potential risks and
benefits associated with each
instrument
Does not assess extrinsic and intrinsic
factors that the company will want to
consider in its investment decisions
Value
30
30
Price Impact:
Spreadsheet Appendix
Articulation of
Response
Calculates the potential price impact of
extrinsic and intrinsic factors and
expected mitigated risk value of
recommended derivative instruments;
information is presented in a
spreadsheet appendix
Submission has no major errors related
to citations, grammar, spelling, syntax,
or organization
Calculates the potential price impact of
extrinsic and intrinsic factors and
expected mitigated risk value, but
calculations are illogical
Does not calculate potential price
impact of extrinsic and intrinsic factors
30
Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main
ideas
Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent
understanding of ideas
10
Total
100%
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