Description
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment Three
FIN403: Investments
Course Name: Investments
Student’s Name:
Course Code: FIN403
Student’s ID Number: S
Semester: First
CRN:
Academic Year:2025-2026
For Instructor’s Use only
Instructor’s Name: Dr.
Students’ Grade: Marks Obtained/Out of 20
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via
allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented; marks may be
reduced for poor presentation. This includes filling in your information on the
cover page.
• Students must mention question numbers clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students
or other resources without proper referencing will result in ZERO marks. No
exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
• Submissions without this cover page will NOT be accepted.
Learning Outcomes:
After completion of Assignment three students will be able to understand the following
CLO4:Demonstrate the valuation methods used for the valuation of the common forms
of debt, equity, property, and derivative securities.
CLO5:Illustrate asset models of a stochastic nature that are appropriate to the
management of liabilities.
The assignment consists of two parts:
Part A: Assignment Questions (10 Marks) (2.5 marks each)
1. Should an investor who thinks interest rates are going down seek low or highcoupon-rate bonds? Relate your answer to duration and price sensitivity.
2. Why do investors tend to pay a smaller premium for a warrant as the price of the
stock goes up?
3. Assume you wish to control the price movement of 100 shares of stock. You may
buy 100 shares of stock directly or purchase a call option on the 100 shares.
Which strategy is likely to expose you to the larger potential dollar amount of
loss? Which strategy is likely to expose you to the larger potential percent loss on
your investment?
4. How can using the financial futures markets for interest rates and foreign
exchange help financial managers through hedging? Briefly explain and give one
example of each.
Part B: Presentation Topic:
“Interest Rate Expectations and Bond Strategy: The Role of Coupon Rate,
Duration, and Price Sensitivity”
(Submission 5 marks + Presentation 5 marks =10 Marks ):
Kindly paste 6 to 8 slides (PPT’s) in the word file.(Sample attached)
Answers
1. Answer2. Answer3. Answer4. Answer-
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