FINC20018 T1 2017: Individual/Group Case Study Assessment Task 2
Due in Week 10, Friday, 19 May 2017, 05:00 PM AEST.
1. Assessment Information
This is a group assignment for on campus students. The group should consist of no more than 2 students.
Off campus (FLEX) students may also do this assignment in group of 2, but this is likely to be difficult. Therefore, off campus students may do this assignment individually.
If students do this assignment as a group, only one member of the group will submit the assignment online by uploading it in Moodle.
Please make sure you click on the submit button after uploading or else the submission will remain as a draft and will not be marked.
The marksheet of this assignment is your coversheet and the names of the students in the group must be clearly indicated, or if you are doing the assessment individually, your name is to be written on the marksheet.
For students doing the assignment in a group of 2, by completing the names in the marksheet, you are acknowledging that both of you have contributed almost a similar amount of time and effort. The same mark will be awarded to both. Should you believe you should get more marks than your team member, then both of you must provide a signed declaration of how the marks are to be divided. This pdf declaration is to be upload separately on the Moodle site.
2. Requirements for both case studies in Assessment 2
Please present the answers of both case studies in two separate reports in report format saved into one word document. No Executive Summary or Contents page is required. A short introduction and a short conclusion will be ideal. Provide (create your own) a title that indicate what you are trying to discuss for each report.
Students, please write essay type responses in your own words WITH IN-TEXT REFERENCES to support your answers.
Where copying and paraphrasing from other sources results in high % similarity, marks will be deducted as shown on the marksheet. Therefore, proper use of in-text referencing is important and avoid direct quotes. Turnitin will be used to check % similarity. As a guide, % similarity more than 20% will not be awarded the full mark for this category.
Please do not copy the questions to be answered from the textbook as it would be reflected as part of the % similarity.
Under extenuating circumstances where high % similarity indicates copying and paraphrasing from written works of other students in CQU or other universities or any other institutions world-wide, the assignment may be reviewed by academic misconduct board for appropriate actions.
The rubric on the marksheet below is to let you understand how the marks are distributed and awarded for each question. For calculation questions, marks will be awarded for the accuracy in the calculations, showing the right formulae to be used, the steps shown in arriving at the answers, the correct answers and any diagrams/timeline as required. Correct answers alone will give you 50% of the total mark. Marks will be awarded for clarity of explanations and expressing yourself in your own words. Concise description and correctness of answers are also important together with any diagrams or figures where applicable.
The assignment will be marked out of 80 marks but will be scaled down to 20 marks. Penalty for late submission is 5% per calendar day, i.e, 1 mark per calendar day (including Saturday and Sunday).
PLEASE NOTE THAT 3 STUDENTS IN A GROUP IS NOT ACCEPTED. ANY GROUPS OF MORE THAN 2 STUDENTS IN A GROUP WILL BE PENALISED BY DEDUCTING 8 MARKS OUT OF THE TOTAL 20 MARKS AWARDED TO THE ASSIGNMENT.
3. Assessment Questions
Please provide answers / solutions to the following two Case Studies in two separate reports:
3.1 Case Study 1: Financial markets
“Troy Dexter is an affluent venture capitalist based in Sydney. In 2009 Troy founded a hedge fund called Northwest Capital Management. A hedge fund is an investment fund whose aim is to deliver positive returns on money invested while minimising risk. A hedge fund can be thought of as a company whose main activity is to invest in a range of financial assets. Troy’s hedge fund adopts a macro investment strategy that aims to profit from significant shifts in the economy. Apart from his own money which he uses to invests in a range of financial assets, the fund is also open to investors who can participate in the fund for an annual management fee. Although hedge funds aim at reducing risk by employing different hedging techniques, there is still a certain element of risk as there are periods where the returns on investments are negative. Troy’s vision of the future is that the strong growth in Australian housing market will come to an end, economic growth will stall and the price of oil will escalate. This Troy is currently buying treasury bonds in the debt markets and energy stocks in the share market.
1. From the point of view of Northwest Capital Management, are treasury bonds and energy stocks direct or indirect securities? Explain.
2. Consider an investor who invests money in Northwest Capital Management. The money ends up being invested in treasury bonds and energy stocks. From the perspective of the investor, does she hold direct securities by investing in Northwest Capital Management? Explain.”(Petty et al., 2012, p. 79)
For this case study, please make sure you provide at least 5 different peer-reviewed references plus your prescribed textbook to develop and demonstrate your research skills as a financial analyst in training. Make sure you explain your reasons for choosing a position in each answer in your own words and supported by evidence in the form of peer-reviewed references.
Word limit: Case 1 should be approximately 1,500 words (or not longer than 4 pages).
3.2 Case Study 2: “Making Norwich Tool’s lathe investment decision
Norwich Tool, a large lathe machine shop, is considering replacing one of its lathes with either of two new lathes-lathe A or lathe B. Lathe A is a highly automated, computer-controlled lathe; lathe B is a less expensive lathe that uses standard technology. To analyse these alternatives,”(Gitman, 1994, p. 393) you, “a financial analyst, prepared estimates of the initial investment and incremental (relevant) cash inflows associated with each lathe. These are summarised in the following table: