FIN 340 Milestone One Guidelines and Rubric Overview.docx

FIN 340 Milestone One Guidelines and Rubric
Overview: As an investor for yourself or your clients, you have
the job of developing investment objectives and a plan to
achieve those objectives and then make
subsequent investments in appropriate assets accordingly. This
process can be collectively termed “the investment process.” It
is helpful to break the process
down into the four core concepts that underpin any sound
investment process.
First, you must understand what you are investing in. You have
to know the underlying characteristics of the investment. What
type of asset is it? What type of
security? How is it priced? What are the expected cash flows?
Who are the typical investors and what are their typical
motives? If you do not understand the
answers to those questions, then the initial expectations you
develop about the value and risk of the asset will be
fundamentally flawed. This sets you up for
missteps that can lead to underperforming your investment
objectives.
Second, you must be able to estimate the value of the asset.
Valuation is about assessing the estimated cash flows of the
asset. This is a key component of
discerning absolute return potential and the differences between
competing assets. It has a significant influence on the third step
in the process as well.

The third step is developing a thesis about an asset's expected
return and the associated risk. This is accomplished by
assessing your valuation estimates against
the current market price and any developing economic or market
dynamics that may impact your expected valuation or its
pricing. The market is constantly
changing, and these expectations need to be monitored on a
regular basis to ensure they continue to correspond to the
objectives you are trying to achieve.
Finally, you must understand how the assets in a portfolio
interact with one another. It is likely that you will not have just
one investment, so any additional
assets will impact the overall performance of the portfolio. You
want to formulate a plan to add assets that, when combined
together, will have the potential to
meet your objectives. Putting all of these steps together into a
consistent, thorough process will position you to better meet the
investment objectives laid out
at the beginning.
Prompt: This milestone involves creating a draft of the client
analysis section of the final project. Use the Final Project
Scenarios document, which has the client
scenarios and tables needed to complete the final project.
Specifically, the following critical elements must be addressed
in this milestone:
I. Client Analysis: In this section, you will analyze your clients’
financial documentation and determine their risk tolerance and
objectives. To effectively
address the critical elements in this section, you must analyze
the information for both client one and client two.

A. Analyze each client’s financial documentation in order to
perform the following evaluative activities. Be sure to support
your analysis with
relevant client information.
1. Explain the clients’ risk tolerances.
http://snhu-
media.snhu.edu/files/course_repository/undergraduate/fin/fin34
0/fin340_final_project_scenarios.docx
2. Explain the clients’ return objectives.
3. Explain the clients’ liquidity objectives.
B. Using the three objectives above, write a brief investment
statement classifying the clients into one of the following
categories: growth, income,
or capital preservation. Justify your response with specific
client information.
Rubric
Guidelines for Submission: Your client analysis should a 2- to
4-page Microsoft Word document, double spaced, with 12-pt.
Times New Roman font, one-inch
margins, and citations cited in APA format.
Critical Elements Proficient (100%) Needs Improvement (75%)
Not Evident (0%) Value
Client Analysis: Client

Information: Risk
Tolerances
Explains the clients’ risk tolerances,
supporting the explanation with
relevant client information
Explains the clients’ risk tolerances,
supporting with client information, but
explanation is missing components, or
supporting information is missing or
contains inaccuracies
Does not explain the clients’ risk tolerances 35
Information: Return
Objectives
Explains the clients’ return objectives,
supporting the explanation with
relevant client information
Explains the clients’ return objectives,
Does not explain the clients’ return
objectives
20

Information: Liquidity
Objectives
Explains the clients’ liquidity
objectives, supporting the explanation
with relevant client information
Explains the clients’ liquidity objectives,
Does not explain the clients’ liquidity
objectives
20
Client Analysis: Brief
Investment Statement
Writes a brief investment statement
based on client analysis and classifies
clients into a category, justifying
response with specific client
information
Writes a brief investment statement based
on client analysis and classifies clients into a
category, justifying response with specific
client information, but response is missing
components, or supporting information is
missing or contains inaccuracies

Does not write a brief investment
statement
20
Articulation of
Response
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
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
5
Total 100%
write about the ethical implications and the impact of the events
that are described. The case study includes a set of questions
that you should answer. Based on Case Study 8.4: Have Gun

Will Travel.
Write a four to six (4-6) page paper in which you:
1. Analyze the questions associated with your chosen case study
and discuss them using concepts you learned in this course.
2. Explain your rationale for each of your answers to your
chosen case study.
3. Format your assignment according to the following
formatting requirements:
a. Typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides.
b. Include a cover page containing the title of the assignment,
the student’s name, the professor’s name, the course title, and
the date. The cover page is not included in the required page
length.
c. Cite your textbook as a reference.
d. Include a reference page. Citations and references must
follow APA format. The reference page is not included in the
required page length.
Article:
ORGANIZATIONAL THEORISTS AND EMPLOYEE advocates
frequently emphasize the importance, from both a moral and a
practical point of view, of companies’ respecting the rights of
their employees. Many employees spend long hours at work and
remain tethered to the job by phone or computer even when they
are off-site; not just their careers but also their friendships,
social identity, and emotional lives are tied up with their work.
All the more reason, it seems, that companies should recognize
and respect their moral, political, and legal rights. But
enshrined in our Constitution is one right that frequently gets
overlooked in discussions of the workplace: the right to bear
arms.88 In 2002 Weyerhaeuser, the Seattle-based timber-
products company, fired several employees at an Oklahoma
plant who were discovered to have violated company policy by

keeping guns in their vehicles. Their dismissal provoked a
response from the National Rifle Association (NRA) and other
gun-rights advocates, which since then have been lobbying for
legislation that would make it illegal for companies to bar
employees from leaving guns in their cars in company parking
lots. Although no state requires companies to allow workers to
carry weapons into the workplace, four states have passed laws
guaranteeing them the right to keep guns in their cars, and
several other states are weighing whether to follow suit. Gun
advocates argue that licensed gun owners should have access to
their weapons in case they need them on the trek to and from
work. If an employer can ban guns from workers’ cars, “it
would be a wrecking ball to the Second Amendment” of the
U.S. Constitution, says Wayne LaPierre, executive vice
president of the NRA. Brian Siebel, a senior attorney at the
Brady Center to Prevent Gun Violence, thinks otherwise. He
sees these laws as “a systematic attempt to force guns into every
nook and cranny in society and prohibit anyone, whether it’s
private employers or college campuses … from barring guns
from their premises.” But that’s not how UCLA law professor
Eugene Volokh looks at it. “It’s part of the general movement,”
he says, “to allow people to have guns for self-defense not only
at home, but in public places where they’re most likely needed.”
For his part, LaPierre of the NRA contends that the legal right
of people to have guns for personal protection is largely
nullified if employers can ban guns from the parking lot.
“Saying you can protect yourself with a firearm when you get
off work late at night,” he argues, “is meaningless if you can’t
keep it in the trunk of your car when you’re at work.”
Interpreting the somewhat ambiguous language of the Second
Amendment is not easy. It only says, “A well-regulated Militia,
being necessary to the security of a free State, the right of the
people to keep and bear Arms, shall not be infringed.” All
jurists agree, however, that the Second Amendment does not
make all forms of gun control unconstitutional and that, like the
rest of the Bill of Rights, it places restrictions only on what

government, not private parties, may do. In particular, the
Second Amendment does not give gun owners a constitutionally
protected right to carry their weapons onto somebody else’s
private property against the wishes of the owner. “If I said to
somebody, ‘You can’t bring your gun into my house,’ that
person’s rights would not be violated,” explains Mark Tushnet,
a Harvard law professor. For this reason, the American Bar
Association sides with business owners and endorses “the
traditional property rights of private employers and other
private property owners to exclude” people with firearms. Steve
Halverson, president of a Jacksonville, Florida, construction
company agrees that business owners should be allowed to
decide whether to allow weapons in their parking lots. “The
larger issue is property rights,” he says, “and whether you as a
homeowner and I as a business owner ought to have the right to
say what comes onto our property.” However, Tennessee state
senator Paul Stanley, a Republican sponsor of legislation
requiring that guns be allowed in company parking lots, begs to
differ. “I respect property and business rights,” he says. “But I
also think that some issues need to overshadow this…. We have
a right to keep and bear arms.” Other gun advocates think that
the property-rights argument is a red herring. Corporations are
not individuals, they argue, but artificial legal entities, whose
“rights” are entirely at the discretion of the state. What’s really
going on, they think, is that some companies have an anti-gun
political agenda. Property rights, however, aren’t the only thing
that companies are concerned about. Business and other
organizations have a widely acknowledged duty to keep their
workplaces—and their employees—as safe as possible, and that
means, many of them believe, keeping their campuses free of
weapons. There are more than five hundred workplace
homicides per year; in addition, 1.5 million employees are
assaulted at work, many of them by coworkers or former
employees. Having guns anywhere in the vicinity, many
employers worry, can only make volatile situations more
deadly. “There’s no need to allow guns [into] parking lots,”

says the Brady Center’s Siebel. “The increased risks are
obvious.” Steve Halveson drives that point home, too. “I object
to anyone telling me that we can’t … take steps necessary to
protect our employees.” For him it’s no different from banning
guns from his construction sites or requiring workers to wear
hard hats. “The context is worker safety, and that’s why it’s
important.”
1. Do you have a moral, not only a legal, right to own a gun?
Assume that either the Second Amendment or state law gives
you a legal right to keep a gun in your car when you drive. Do
you also have a moral right to do this? Do you have either a
moral or a legal right to park a car with a loaded gun in a
privately owned public parking lot regardless of what the lot’s
owner wants?
2. In your view, do employees have either a moral or a legal
right to park cars with guns in them in the company parking lot?
If so, what about the property rights and safety concerns of
employers? If employees don’t have this right, would it be good
policy for companies to allow them to stow guns in their cars
anyway? Do companies have good grounds for being concerned
about weapons in their parking lots?
3. Do you agree with the NRA that if companies ban guns from
their parking lots, this restriction would take “a wrecking ball
to the Second Amendment” or nullify the right of people to have
weapons for self-defense? Explain why or why not. In your
view, have gun advocates been guilty of politicizing this issue?
Do you think state legislatures are right to get involved, or
should the matter be left to companies and employees to settle?

4. Because the workplace is the company’s private property, the
company could choose, if it wished, to allow employees to bring
guns not only into the parking lot but also into the workplace
itself. Are there ever circumstances in which doing so might be
reasonable? Or would the presence of guns automatically violate
the rights of other employees to be guaranteed a safe working
environment?
FIN 340 Final Project Scenarios and Tables
You will use these scenarios and tables to complete the final
project.
Client 1:
Ezra, age 26, is single. However, he is dating and preparing to
get engaged. He will need roughly $5,000 for an engagement
ring almost immediately, and expects he will need $10,000–
$15,000 for the wedding in the next 12–24 months. He is
currently employed and earns about $70,000 a year in salary.
This salary is enough to cover all his taxes and normal living
expenses of approximately $4,800. This leaves him with about
$1,000 in savings each month ($350 to 401K, $650 to savings).
He has been able to save roughly $15,000 to date in a 401K plan
from work and about $20,000 in cash savings. His 401K plan
has been invested 100% in the stock market, including some
sector-specific funds. His other savings have been in interest-
bearing savings and cash substitutes such as money market
funds. He recently received a windfall of $60,000, and this
prompted him to come to you for some advice. The following
are few of Ezra’s comments to help guide your thoughts:
1. “I understand I am young, so I need to take on as much risk

as I can.”
2. “I am willing to lose 30–40% on my invested capital if the
return is commensurate.”
3. “I do like to have a decent sized cushion in the bank in case
something happens at my job.”
4. “I don’t foresee my risk tolerance changing after I get
married.”
5. “Do you have any good stock tips?”
Client 2:
Jacob and Rachel, 53 and 52 respectively, are married with four
children. Two of the children are currently in college, and two
are in high school. They expect the other two children to attend
college. The couple has done relatively well for themselves and
earn roughly $275,000 before tax between the two of them,
which equates to $190,000 after taxes. They live well below
their means, and this should allow them to cover all of their
children’s college expenses out of pocket, but it will not leave
much for them to save over the next six to eight years. Through
savings and portfolio growth, they have managed to accumulate
$900,000. To this point, they have been moderately aggressive
(70–75% equities) with their portfolio, but they feel that they
need to begin preparing the portfolio for partial retirement in
eight years, and full retirement in 13 years.
1. “I know we still need to be somewhat aggressive—we could
live until we’re 90—so we need to plan for some growth even in
retirement.”
2. “We definitely can’t afford to take a big hit in our portfolio.
We don’t have enough time to recover.”
3. “Our jobs allow us to work part-time in retirement, and we
will probably do so as long as we are able.”
4. “What do bond yields look like today?”
5. “I think we’ll need to draw on 3–5% of our portfolio in
retirement. We’d like to earn enough income from the portfolio

to cover that.”
CAPM Inputs:
Market Return 9%
Risk-free Rate 0.75%
Stock Analysis Table:
Symbol
Estimated Beta
Dividends
Earnings
Sales
Free Cash Flow
5-Year Dividend Growth
Average Industry P/E Ratio
Average Industry P/S Ratio
Free Cash Flow Growth
IBM
0.86
Use Last Year
Use Last Year
Use Last Year
Use Last Year
13.7
23.7
1.12
2.60%
KO
0.66
Use Last Year
Use Last Year
Use Last Year
Use Last Year
8.3

22.6
2.2
6.50%
BMY
0.78
Use Last Year
Use Last Year
Use Last Year
Use Last Year
2.9
24.4
3.37
N/A
ORCL
1.1
Use Last Year
Use Last Year
Use Last Year
Use Last Year
21.1
20.5
4.45
10%
MMM
0.98
Use Last Year
Use Last Year
Use Last Year
Use Last Year
15.1
23.8
2.59
7%
BAX
0.75
Use Last Year

Use Last Year
Use Last Year
Use Last Year
-16.9
36.09
3.68
N/A
BIG
1.04
None
Use Last Year
Use Last Year
Use Last Year
N/A
23
1.12
N/A
NFLX
1.57
None
Use Last Year
Use Last Year
Use Last Year
N/A
52.5
6
N/A
AKAM
1.34
None
Use Last Year
Use Last Year
Use Last Year
N/A
41.8
3.58

17%
GE
1.12
Use Last Year
Use Last Year
Use Last Year
Use Last Year
9.7
23.8
2.59
N/A
Available Assets Table: Stocks listed in Analysis Table and
these additional assets
Symbol
Estimated Beta
Standard Deviation
SPY
1
13%
IWM
1.15
16.50%
EFA
1.03
15%
EEM
1.09
20%
SHY
0
1%
IEF
-0.2

6%
TLT
-0.48
13%
LQD
-0.02
5.25%
HYG
0.38
7.50%
Ex-post Return Statistics:
Symbol
Holding Period Return
Standard Deviation
Benchmarks
Holding PeriodReturn
Standard Deviation
IBM
8%
20.00%
Growth
9.6%
13.1%
KO
6%
13.00%
Capital Appreciation
8.1%
8.6%
BMY
13%

28.00%
Income
7.7%
7.2%
ORCL
2%
16.00%
Capital Preservation
5.8%
5.2%
MMM
6%
14.00%
BAX
-6%
16.00%
BIG
13%
32.00%
NFLX
18%
45.00%

AKAM
21%
37.00%
GE
10%
16.00%
SPY
9%
11.00%
IWM
14%
18.00%
EFA
9%
15.00%

EEM
-1%
19.00%
SHY
1%
1.00%
IEF
4%
6.00%
TLT
4%
13.50%
LQD
7%
6.00%

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