Running Head: CLIENT ANALYSIS 1 CLIENT ANALYSIS 7 CLIENT ANALYSIS Ashley Robinson Southern New Hampshire University Client Analysis 1. Clients’ risk tolerances. Risk tolerance refers to the appropriate blending of a client’s readiness to take a risk and their good capability to take the chance. A client’s willingness to take a risk shows the extent at which they are willing to overlook their emotional drive in their decisions regarding investment (Knechel & Salterio, 2016). The cost of the emotions in most cases prevails over the abiding profit of taking the risk. On the other hand, the capability of a client to take risk refers to independent scrutiny of the whole account of their cash currents, which integrates their liquid possessions, expenditures, reserves, and capital flows. The readiness of a client to take a chance befits more if their capability to take the risk is more significant (Shrier, 2015). Client 1: Ezra has a high level of risk tolerance. He says that he needs to take as much risk as possible for the reason that he is still young with a lot of dreams to achieve in the future, including an expensive wedding. Ezra is also willing to take a risk in that one of his comments is that he could lose 30-40 % of his investments if the return is adequate, which implies that he overlooks his emotions, though they cost a lot, to generate more returns in future. Also, Ezra says that he does not foresee his risk tolerance getting changed after he marries. He has the capabilities for taking risks since he receives a salary enough to cater for all his expenses and leave him with about $1000 a month. Integration of both aspects of risk tolerance makes him a risk tolerant person. Client 2: Jacob and Rachel are incapable of taking risks in that they earn roughly $190,000 after taxes, which does not leave them with much to save over the next six to eight years since they spend a lot with the inclusion of school fees for their four children; two in college level and two in high school. However, they are not willing to take significant risks since they are aged and they may not have enough time to recover in case of a hit in their portfolio. 2. Return objectives. Return objectives involve the extent which a client is willing to take given some amount of projected return. It also requires an evaluation of the need for preservation of capital (Zhang, 2018). Client 1: Ezra is willing to take the risk of losing 30-40% of his invested capital with the aim of acquiring more profits in future. However, he likes to save some of his income in the bank to secure his future if he loses his job or something happens in his career that would affect his salary in the future. Client 2: Jacob and Rachel have succeeded to accrue $900,000 through their reserves and portfolio development. However, these could not sustain their needs years after their retirement. For this reason, they needed to hatch a plan of how to raise more finances to mainta.

1. Running Head: CLIENT ANALYSIS 1
CLIENT ANALYSIS 7
CLIENT ANALYSIS
Ashley Robinson
Southern New Hampshire University
Client Analysis
1. Clients’ risk tolerances.
Risk tolerance refers to the appropriate blending of a client’s
readiness to take a risk and their good capability to take the
chance. A client’s willingness to take a risk shows the extent at
which they are willing to overlook their emotional drive in their
decisions regarding investment (Knechel & Salterio, 2016). The
cost of the emotions in most cases prevails over the abiding
profit of taking the risk. On the other hand, the capability of a
client to take risk refers to independent scrutiny of the whole
account of their cash currents, which integrates their liquid
possessions, expenditures, reserves, and capital flows. The
readiness of a client to take a chance befits more if their
capability to take the risk is more significant (Shrier, 2015).
Client 1:
Ezra has a high level of risk tolerance. He says that he needs to
take as much risk as possible for the reason that he is still
young with a lot of dreams to achieve in the future, including an
expensive wedding. Ezra is also willing to take a risk in that

2. one of his comments is that he could lose 30-40 % of his
investments if the return is adequate, which implies that he
overlooks his emotions, though they cost a lot, to generate more
returns in future. Also, Ezra says that he does not foresee his
risk tolerance getting changed after he marries. He has the
capabilities for taking risks since he receives a salary enough to
cater for all his expenses and leave him with about $1000 a
month. Integration of both aspects of risk tolerance makes him a
risk tolerant person.
Client 2:
Jacob and Rachel are incapable of taking risks in that they earn
roughly $190,000 after taxes, which does not leave them with
much to save over the next six to eight years since they spend a
lot with the inclusion of school fees for their four children; two
in college level and two in high school. However, they are not
willing to take significant risks since they are aged and they
may not have enough time to recover in case of a hit in their
portfolio.
2. Return objectives.
Return objectives involve the extent which a client is willing to
take given some amount of projected return. It also requires an
evaluation of the need for preservation of capital (Zhang, 2018).
Client 1:
Ezra is willing to take the risk of losing 30-40% of his invested
capital with the aim of acquiring more profits in future.
However, he likes to save some of his income in the bank to
secure his future if he loses his job or something happens in his
career that would affect his salary in the future.
Client 2:
Jacob and Rachel have succeeded to accrue $900,000 through
their reserves and portfolio development. However, these could
not sustain their needs years after their retirement. For this
reason, they needed to hatch a plan of how to raise more
finances to maintain them since they could live till they are 90.
Their professions could let them work share, which they could

3. do for as long as they can work. They would also need to get 3-
5 % of their portfolio upon stepping down and hence they
needed to make sufficient income from their collection to cover
that.
3. Liquidity objectives.
Liquidity refers to the capital to cash (Zureck & Jäger, 2018).
Client 1:
Ezra has invested his 401K plan fully in the stock market,
which includes some funds specified for some sectors. Some of
his savings in the bank bear interests while others act as cash
substitutes such as money market funds. He asks the adviser if
they have good stock tips, which shows that he has some assets
to convert into cash.
Client 2:
Jacob and Rachel are willing to draw 3-5% of their portfolio,
which includes some of their capital assets, which is to help
them generate income after their retirement. They also ask their
adviser what the bonds looked like at that time, which implies
that they had some assets to sell and convert into cash.
Investment statement
Client 1:
Current Obligations:
1) He needs about $5000 to purchase an engagement ring.
2) He needs money for wedding expenses costing $10,000 -
$15,000.
Spending Plan:
His salary is used to cater for all of his expenses and liabilities
such as taxes. His investment portfolio should cover capital
needed to accomplish his long-term objectives. Monthly savings
will contribute most of the investments in his collection.
Risk management:
Now that Ezra is risk tolerant, it is recommendable that he gets
insured to avoid unintended expenditures in the future
(Bagheri.et.al, 2017).
Portfolio Review:
Ezra’s portfolio review will take place once a year or at times

4. of significant financial changes. It will also be balanced yearly,
and the value of assets will not have more than 12% changes in
a year. Changes done should not exceed 12% in a year
(DeFusco.et.al, 2015).
Client 2:
Current obligations:
1) Jacob and Rachel need to ensure that their two children in
high school join college and hence they would have to cover all
their school expenses.
2) The couple needs to generate more income to sustain them
in their old age when they are retired.
Spending Plan
The monthly salaries of the couple should be able to cater for
their monthly expenditure and also remain with some savings.
Their investment portfolio should have enough finances to
enable them to draw 3-5% of them from the collection to allow
them to generate more income to sustain them to up to until
they are 90.
Portfolio Review:
The couple’s investment portfolio review will take place twice a
year or at times of significant financial changes. It will also be
balanced yearly, and the value of assets will not have more than
5% changes in six months. Changes done should not exceed
15% in six months.
References
Bagheri, N., Abdelaziz, F. B., & Rao, A. (2017, December).
Ethical Stochastic Objectives Programming Approach for
Portfolio Selection. In International Conference on Advances in
Business, Management and Law (ICABML) (Vol. 1, No. 1, pp.
495-505).
DeFusco, R. A., McLeavey, D. W., Pinto, J. E., Anson, M. J., &
Runkle, D. E. (2015). Quantitative investment analysis. John
Wiley & Sons.
Knechel, W. R., & Salterio, S. E. (2016). Auditing: Assurance
and risk. Routledge.

5. Shrier, I. (2015). Strategic Assessment of Risk and Risk
Tolerance (StARRT) framework for return-to-play decision-
making. Br J Sports Med, 49(20), 1311-1315.
Zhang, X. (2018). Portfolio Objectives and Trading and
Investment Strategies. In Capital Markets Trading and
Investment Strategies in China (pp. 263-327). Springer,
Singapore.
Zureck, A., & Jäger, T. (2018). More than 20 percent of in
Germany living people have a migration background. From the
economic point of view and in terms of customer protection, the
group of people is noteworthy. Within this paper, the group of
people with migration background is compared to people
without migration background due to financial advisory,
investment objectives, and yearly performance of personal
investments. Generally, only a little difference was identified.
People with a migration background focus more on security
.... International Journal of Innovation and Economic
Development, 4(3), 7-11.
FIN 340 Final Project 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

6. 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

7. investment objectives laid out
at the beginning.
The project is divided into two milestones, which will be
submitted at various points throughout the course to scaffold
learning and ensure quality final
submissions. These milestones will be submitted in Modules
Three and Five. The final product will be submitted in Module
Seven.
In this assignment, you will demonstrate your mastery of the
following course outcomes:
fferentiate between investment vehicles, asset classes, and
security types for effectively selecting investment exposures
of stocks and bonds relative to current market prices for
informing investment decisions
investment portfolios that appropriately address client risk and
return objectives
implications on expected returns
Prompt
For this assignment, you will assume the role of a financial
advisor responsible for developing an investment portfolio for a

8. client. In developing the portfolio,
you will interpret client financial information and craft a sound
and informed portfolio that is personalized to the unique needs
of your client. You will also select
five stocks from a provided list and produce valuations by
selecting the most appropriate valuation model. These
valuations may also be used within the
portfolio you are developing for your client.
Specifically, the following critical elements must be addressed:
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.
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.
II. Stock Analysis: In this section, you will select five stocks
from the provided list and determine their values by applying an
appropriate valuation model

9. from the following options: price to multiple model (earning or
sales), dividend valuation model, or free cash flow to equity
valuation model.
A. Determine the value of each stock by using an appropriate
model based on the characteristics provided for each stock; use
each model at least
once.
B. Provide a rationale for the stock valuation method you chose
for each stock. Cite specific information to support your
decisions.
C. Using the calculated valuation, the current market price, and
historical performance, determine the expected return for each
stock.
III. Portfolio Development: In this section, you will develop a
portfolio for a client (Ezra or Jacob and Rachel) based on the
client’s risk tolerance, return
objectives, and liquidity objectives. You will select appropriate
assets from the provided list.
A. For the client, develop a portfolio from the list of assets
provided that is informed by your analysis of the client’s
objectives and (if applicable)
the stock valuation you determined.
B. Calculate the expected portfolio return using the CAPM
(beta) model. Based on the risk tolerance and return objective of
the client you didn’t
choose for this assignment, would you design an investment
portfolio that has a higher or lower expected portfolio return,
and why?
C. Calculate the expected portfolio standard deviation. Based on
the risk tolerance and return objective of the client that you

10. didn’t choose for this
assignment, would you design an investment portfolio that has a
higher or lower expected standard deviation, and why?
IV. Portfolio Performances
A. Provide a rationale to present to the client for the portfolio
you have developed. In your rationale, include specific
examples to support your
recommendations, and be sure to address the following:
1. Explain how your recommendations align with the client’s
risk tolerance.
2. Explain how your recommendations align with the client’s
return objectives.
B. Using the provided ex-post portfolio return statistics,
evaluate the portfolio’s performance and compare it to its
appropriate benchmark. In your
evaluation, be sure to address the following:
1. Calculate portfolio return.
2. Calculate the Sharpe ratio for the portfolio and benchmark.
3. Calculate the Treynor’s measure for the portfolio only.
4. Calculate Jensen’s measure for the period for the portfolio
only.
Milestones
Milestone One: Client Analysis
In Module Three, you will create a draft of the client analysis
portion of the final project. This milestone is graded with the

11. Milestone One Rubric.
Milestone Two: Stock Analysis and Portfolio Development
In Module Five, you will submit a draft of the stock analysis
and portfolio development portions of the final project. This
milestone is graded with the Milestone
Two Rubric.
Final Submission: Portfolio and Rationale
In Module Seven, you will submit your portfolio and rationale.
It should be a complete, polished artifact containing all of the
critical elements of the final
product. It should reflect the incorporation of feedback gained
throughout the course. This milestone will be graded using the
Final Project Rubric.
Final Project Rubric
Guidelines for Submission: Your submission should be 5–7
pages, double spaced, with 12-point Times New Roman font,
one-inch margins, and APA formatting.

12. Work must be shown for all calculations. You may use and
upload an Excel workbook to show your calculations. In your
written paper, if you are referring to data
that is found within an uploaded Excel workbook, be sure to
include a citation—for example, “the portfolio’s expected return
is 7.2% (E64, Sheet1, WB1),” where
E64 is the cell that the calculation took place in, Sheet1 is the
tab, and WB1 is designating the name of your file. This ensures
that your instructor can quickly and
accurately check data entry, formula use, and financial
calculations.
Critical Elements Exemplary Proficient Needs Improvement Not
Evident Value
Client Analysis:
Client Information:
Risk Tolerances
Meets “Proficient” criteria, and
response demonstrates a
nuanced understanding of client
risk tolerance causes (100%)
Explains the clients’ risk
tolerances, supporting the
explanation with relevant client
information (85%)
Explains the clients’ risk
tolerances, supporting with client
information, but explanation is
missing components, or

13. supporting information is missing
or contains inaccuracies (55%)
Does not explain the clients’ risk
tolerances (0%)
6
Client Analysis:
Client Information:
Return Objectives
Meets “Proficient” criteria, and
response demonstrates an
advanced ability to extract a
thorough and accurate summary
of client return objectives
(100%)
Explains the clients’ return
objectives, supporting the
explanation with relevant client
information (85%)
Explains the clients’ return
objectives, supporting with client
information, but explanation is
missing components, or
supporting information is missing
or contains inaccuracies (55%)
Does not explain the clients’ return
objectives (0%)
4.8

14. Client Analysis:
Client Information:
Liquidity Objectives
Meets “Proficient” criteria, and
response demonstrates an
advanced ability to extract a
thorough and accurate summary
of client liquidity objectives
(100%)
Explains the clients’ liquidity
objectives, supporting the
explanation with relevant client
information (85%)
Explains the clients’ liquidity
objectives, supporting with client
information, but explanation is
missing components, or
supporting information is missing
or contains inaccuracies (55%)
Does not explain the clients’
liquidity objectives (0%)
4.8
Client Analysis:
Brief Investment
Statement

15. Meets “Proficient” criteria, and
response comprehensively
portrays each client’s
investment objectives (100%)
Writes a brief investment
statement based on client
analysis and classifies clients into
a category, justifying response
with specific client information
(85%)
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
(55%)
Does not write a brief investment
statement (0%)
4.8
Stock Analysis:
Determine the Value
Accurately determines the value
of each stock using an

16. appropriate model based on the
characteristics provided for each
stock (100%)
Determines the value of each
stock, but determination contains
inaccuracies, or model applied is
not appropriate (55%)
Does not determine the value of
each stock (0%)
8
Stock Analysis:
Stock Valuation Method
Meets “Proficient” criteria, and
response demonstrates keen
insight into the appropriate
application of stock valuation
methods (100%)
Provides a rationale for the stock
valuation method chosen for
each stock, citing specific
information to support decisions
(85%)
Provides a rationale for the stock
valuation method chosen for each
stock, but rationale is missing
components or misaligned, or
information cited is not relevant
or nonexistent (55%)

17. Does not provide a rationale for the
stock valuation method chosen for
each stock (0%)
6
Stock Analysis:
Expected Return
Accurately determines the
expected return for each stock
based on the calculated
valuation, current market price,
and historical performance
(100%)
Determines the expected return
for each stock based on the
calculated valuation, current
market price, and historical
performance, but determination
is missing components or contains
inaccuracies (55%)
Does not determine the expected
return of each stock (0%)
6
Portfolio Development:
Develop a Portfolio
Meets “Proficient” criteria, and

18. response demonstrates keen
insight into the integration of
client objectives to develop a
diverse and comprehensive
portfolio (100%)
Develops portfolio from the lists
of assets provided that are
informed by an analysis of the
client’s objectives (85%)
Develops portfolio from the lists
of assets provided that are
informed by an analysis of client’s
objectives, but portfolio is missing
components or is illogical (55%)
Does not develop a portfolio for the
client (0%)
6
Portfolio Development:
Expected Portfolio
Return
Accurately calculates the
expected portfolio return for a
portfolio using the CAPM model
and accurately discusses the
other client (100%)
Calculates the expected portfolio
return using the CAPM model, but

19. calculation contains inaccuracies
or the other client is not
accurately discussed (55%)
Does not calculate the expected
portfolio return using the CAPM
model or does not discuss the other
client (0%)
8
Portfolio Development:
Expected
Standard Deviation
Accurately calculates the
expected portfolio standard
deviation for the portfolio and
accurately discusses other client
(100%)
Calculates the expected portfolio
standard deviation, but
calculation contains inaccuracies
or other client is not accurately
discussed (55%)
Does not calculate the expected
portfolio standard deviation or does
not discuss other client (0%)
8

20. Portfolio Performances:
Rationale:
Risk Tolerance
Meets “Proficient” criteria, and
response makes cogent
connections between portfolio
recommendations and the
client’s risk tolerance (100%)
Explains how the
recommendations align with the
client’s risk tolerance, including
specific examples (85%)
Explains how the
recommendations align with the
client’s risk tolerances, but
explanation is misaligned or
missing components or specific
examples (55%)
Does not explain how the
recommendations align with the
client’s risk tolerance (0%)
6
Portfolio Performances:
Rationale:
Return Objectives

21. Meets “Proficient” criteria, and
response makes cogent
connections between portfolio
recommendations and the
client’s return objectives (100%)
Explains how the
recommendations align with the
client’s return objectives,
including specific examples
(85%)
Explains how the
recommendations align with the
client’s return objectives, but
explanation is misaligned or
missing components or specific
examples (55%)
Does not explain how the
recommendations align with the
client’s return objectives (0%)
6
Portfolio Performances:
Portfolio’s
Performance:
Portfolio Return
Accurately calculates the
portfolio return (100%)

22. Calculates the portfolio return,
but calculations are missing
components or contain
inaccuracies (55%)
Does not calculate the portfolio
return (0%)
6
Portfolio Performances:
Portfolio’s
Performance:
Sharpe Ratio
Accurately calculates the Sharpe
ratio for the portfolio and
benchmark (100%)
Calculates the Sharpe ratio, but
calculation is missing components
or contains inaccuracies (55%)
Does not calculate the Sharpe ratio
(0%)
6
Portfolio Performances:
Portfolio Performance:
Treynor’s Measure

23. Accurately calculates Treynor’s
measure for the portfolio
(100%)
Calculates Treynor’s measure but
calculations contain inaccuracies
(55%)
Does not calculate Treynor’s
measure (0%)
4.8
Portfolio Performances:
Portfolio’s
Performance:
Jensen’s Measure
Accurately calculates Jensen’s
measure for the portfolio
(100%)
Calculates Jensen’s measure, but
calculations contain inaccuracies
(55%)
Does not calculate Jensen’s
measure (0%)
4.8
Articulation of
Response

24. Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented in
a professional and easy-to-read
format (100%)
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
(85%)
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas
(55%)
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization that
prevent understanding of ideas
(0%)
4
Total 100%