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Project 3: Investments
The value for this project is 200 points.
During last assignment, you did such an amazing job with Frank’s finances, that he is retaining you as his
financial consultant. Thanks to you, Frank’s financial house is in excellent order. He is utilizing his monthly
cash flow plan, and all of his debts have been paid off, except for a house, which he recently purchased with
a mortgage, and he has established a very healthy emergency fund to help handle unexpected events in the
future. Frank is in the position to set aside $400/month for investing purposes. Of course, he has absolutely
no idea how to proceed, and is turning to you for your outstanding knowledge in this area.
1. One of the first things Frank should understand about investing money is the concept of risk.
Explain in detail the five components of the risk factor.
2. Now that Frank has a better understanding of the concept of risk, he would like to try to reduce the risk of
his future investments.
Frank needs you to outline a strategy of the factors that reduce investment risk.
3. Frank has been told that common stock is at the heart of the United States business economy.
Explain to Frank the reasons why corporate managers use common stock as the preferred
method of corporate financing.
4. Some co-workers of Frank are constantly talking about the stocks that they buy and sell on a weekly
basis, and Frank is very overwhelmed at the amount of stock transactions that his friends go through
during a given week. Frank feels that he will have trouble making the decision to buy or sell a certain
stock.
Give Frank some suggestions that can reduce his anxiety when he makes stock investment
decisions.
5. This information has been a great help for Frank—you are good! Frank now needs an investment strategy
for the stocks that he will purchase.
Provide Frank an analysis of both a long-term and a short-term investment strategy for his
stocks.
6. Now that Frank has an investment strategy for his purchased stocks, he is interested in including some
bonds in his investment portfolio. The problem that Frank is incurring is that he has absolutely no idea
what type bonds there are.
Explain to Frank what type of bonds that he could utilize for his investment portfolio.
7. Last week while having lunch, a friend of Frank’s told him that all her investment money goes into to
mutual funds. Frank just about fainted when he had no idea what she was talking about and realized that
he had so much more to learn in the field investment vehicles.
Explain to Frank the concept of a mutual fund.
Explain to Frank the characteristics of mutual funds.
8. Great work. Now Frank has a much better understanding of mutual funds. While visiting with the human
resource director of his company, Frank understands that he can choose a variety of different types mutual
funds for his 401K portfolio. Frank just sent you a text needing the following information:
Explain to Frank the major fund categories that he can invest his 401K.
Choose three types of categories that would you would suggest he invest as he begins this
journey.
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9. Once again, your financial advice has been a most excellent resource for our friend Frank. He loves his
home that he recently purchased, and is wondering if real estate would be a good investment vehicle to
include in his overall portfolio.
Explain to Frank both the advantages and disadvantages of real estate investments.
10. One last thought on investments for Frank. His grandfather told him that the precious metal of gold would
be a good addition to anyone’s investment portfolio. Frank is intrigued by his grandfather’s advice, but of
course, he needs your help.
Explain to Frank why gold could be a good addition to his investment portfolio
List and explain the variety of ways that Frank could invest in gold.
DELIVERABLES:
To receive full credit for this project, you should explain each answer in detail. Use your
textbook, (Chapters 13-17), notes and Internet research to complete this project.
Value for this project is 200 points
This Project should be a minimum of 1,000 words (not including the repetition of the question).
Each question must be answered for full-credit.
Number and/or provide a brief heading. Please do not copy the questions and paste them in your work.
I will simply delete the wording of the question to attain an accurate word count.
Document should be sent in Microsoft Word Format or PDF file
Include a title page that includes your name and title of project
Save your project with your name in the file name.
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Example: Randy Saleh Project 3 Investments would be my filename
Review the Grading Rubric and Example of Formatting your Projects link
that I have provided for you.
Tip
If you will answer three questions per week, you can easily finish this project stress-free by the due
date!
Check your Course Organizer for the due date
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