Sign In
Not register? Register Now!
Essay Available:
Pages:
3 pages/β‰ˆ825 words
Sources:
3 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 14.04
Topic:

Risks and Returns of Different Investment Instruments

Essay Instructions:

PLEASE ENSURE TO ONLY UTILIZE SCHOLARLY SOURCES. THE FOLLOWING IS A STATEMENT FROM THE PROFESSOR.
"Avoid non-scholarly sources such as investopedia, nerdwallet, and dummies.com."
See attached rubric for the guidelines for this submission. ENSURE THAT ALL GUIDELINES ARE FOLLOWED.
THE CHOSEN COMPANY IS AFFIRM. I have attached Milestone 1 & Milestone 2 for reference. I am not able to upload Milestone 3 seeing that you are currently working on that assignment. If you have any questions please let me know.

The final project for this course is the creation of a market analysis report that analyzes various organized global and domestic exchange markets and compares and contrasts performance for different investment products. In this milestone, you will submit a draft of Risks and Returns (Section IV) of the final project. You will analyze the risks and returns of different investment instruments in the U.S. and non-U.S. markets you selected in Milestone One. You may find it helpful to use online brokerage aids or other tools (e.g., Yahoo! Finance, Bloomberg Business, TD Ameritrade) in conducting this analysis. Review stock, bond, mutual fund, and commodity performance and their movement over time in these markets. Your analysis should include dividend yields, capital gains, price relative to intrinsic values, and foreign exchange considerations, which were discussed in Module Four. Last, you will come to a conclusion about each market’s performance and assess risk versus return when comparing investment vehicles within the different markets. Specifically, the following critical elements must be addressed:

IV. Risks and Returns. Use this section to analyze the risks and returns of different investment instruments in the U.S. and non-U.S. markets you selected. You may find it helpful to use online brokerage aids or other tools in conducting this analysis. Specifically, you should: A. Investment Instruments. Review stock, bond, mutual fund, and commodities performance in the two markets.

Be sure to: 1. Analyze investment returns in each of the two markets, including dividend yields, capital gains, prices relative to intrinsic values, and foreign exchange considerations associated with each of the instruments. Use relevant indicators and visual displays to help present your findings. 2. Explain what your analysis of returns suggests about each market’s performance and how that might affect decisions on where to list. Justify your response. 3. Compare and contrast how the different types of instruments move in the two markets over time, explaining the significance of this information for decisions on where to list. Provide specific examples to support your answer. For example, have certain types of instruments historically performed better in one market over another? Have certain types of instruments yielded higher returns more quickly? 4. Assess the risks versus returns associated with the different types of investment instruments in the two markets. How might these tradeoffs affect listing decisions? Support your response with specific examples. B. Interest and Inflation. Analyze how interest rates and inflation affect different investment instruments and investor decisions. Give specific examples from the two markets selected to support your answer. For example, how do inflation and interest rates affect stock, bond, and mutual fund returns in each market? How does that, in turn, affect business and individual short- and long-term investment planning? C. Taxation. Would tax policies in the two markets make one a better option for IPO listing than the other? Why or why not? Give specific examples.

Essay Sample Content Preview:

Risks and Returns: Draft
Student Name
University
Course
Instructor Name
Due Date Risks and Returns: Draft

Investment Instruments

            An Investment Instrument (II) is a document like promissory note, share certificate, or bond used to obtain a loan and equity capital. The set of eligible securities at Nasdaq includes common stocks, shares, and common equivalents like ADRs (Bajpai, 2021). On the Shanghai Stock Exchange market, eligible securities have mutual funds, stock, bonds, and commodities (SSE, n.d.). There are significant differences and potential similarities in the performance of these investment instruments in each of the two markets: Nasdaq and SSE.

Stocks

            On the American market, the average stock market returns were 15.27% and 13.06% when adjusted for inflation. The average dividend yield was 2.0% and the capital gains for 2020 were averaged at 15% (NASDAQ1, 2022). In contrast, on SSE’s market, the average stock market return was 8% and the average dividend yield was 3.4% and an average capital gain of 43.54% (CEIC, 2022).

Bonds

            On the SSE market, the average absolute return for Chinese bonds is 5% (GlobalEconomy1, 2022). The annual average dividend yield on bonds is 2.61% while capital gains are taxed at 20%. On the NASDAQ market, the average return on bonds is 10% annually. However, this figure stands a 5.5% for governments long-term bonds. The average dividend yield is 1.43% with a capital gain taxation of 10%.

Mutual Fund

            Under mutuals funds, the SSE market recorded a returns average of 5.7% compared to American’s 4.67%. Further, the average annual dividend yield (15 years) for the American market was 6.29% (Reeves, 2020) while that for the Chinese market was 7.38%. The capital gains for China and USA were taxed at 17% and 15% + 4% cess, respectively.

Commodities

Energy products, precious metals, and agricultural products are some of the commodities on the financial market. In early 2022, the average returns on commodity trading in the USA was 7.7% for energy products and 4.2% for non-energy products on the American market (GlobalEconomy1, 2022). On SSE, the average returns through this instrument were 7.5%.  Further, on SSE market, commodity prices were 2% closer to the intrinsic value of commodities while on the NASDAQ market, the relationship was 3.1%.

Implications

            The analysis promises mixed results. For instance, in terms of stocks, investing on the American market would have yielded better returns c...

Updated on
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
Order

πŸ‘€ Other Visitors are Viewing These APA Essay Samples:

HIRE A WRITER FROM $11.95 / PAGE
ORDER WITH 15% DISCOUNT!
Order Now