Q1) The two most important goals for me are making significant charitable contributions and

providing my family members with an excellent lifestyle which includes the best house,
education and healthcare facilities et cetera.

Q2) Yes my majors would be business management. I will definitely get a good job after
graduation as there is good scope of this field.

a) I intend to be an Human Resource advisor.

b) A lot of companies come to the campus like almost 10-15 companies

c) They offer different positions including Human resources adviser, Marketing executive,
Mortgage adviser, Project manager, Sales executive et cetera.

d) I expect around $3,500 as my beginning salary.

e) I am a doer and I will definitely do it as starting from the basic level leads you to great
successes eventually.

f) Yes, I believe its fine to choose a majors that generates a poor job. Actually
determination and passion varied from person to person. You just need to make sure you
are making the most effective decisions.

Q3) Future value = Present value (1 + r)n

4000 = 2000 (1 + 0.06)n
2 = (1.06)n
LN 2 = n LN 1.06

0.693147 = n 0.058269

n = 11.90

It will take 12 years approx..

Q4) Jackie should has two options here: either reduce her expenses or increase her income as this are the only
ways through which she can save more. But according to the mentioned scenario, she is a college student so
she needs to give time to her studies as well. As per this, if would be quite hectic for her to increase her income
due to shortage of time so this should be the second option. What she should actually do is she should reduce
her expenses by listing down all the living expenses and then prioritizing them accordingly. She can sort out
which ones to continue and which ones are just extravagance. Other than this, she can also make some projects
privately and present them at the boutique in order to earn more money.
Q5) saving money is very important in order to deal with unforeseen circumstances or
emergencies. In this situation, they can indulge in smart saving and practice less spending in the
following ways:

 Estimate the needed funds to start savings

 Make a budget for savings
 Cut the wasteful or extra expenses
 Prioritize the expenses
 Invest in saving plans such as mutual funds, bank accounts, shares et cetera
 Auto-deduct savings from their salaries
 Review budget and returns thereon

Q6) 1st year: 6% * 1000 = $60 + $1000

= $1,060

2nd year: 6% * 1060 = $63.60 +$1060

= $1,123.

Q7) FV = P(1+r)^n

Maggie: 10000(1+6%)^40

= $102,857.18 at 65

Bill: 10000(1+6%) ^10

= $17,908.48 at 65

Q8) using excel:

Maggie’s amount after 10 years = FV (6%, 10, -1000,, 1)

= $13,971.64

Maggie’s amount at 65 = FV (6%, 30,, -13971.64, 1)

= $80,246.01

Bill’s amount at 65 = FV (6%, 25, -1000,, 1)

= $58,156.38
Q9) a) Bank loan for trip is questionable

b) Borrowing for buying a home is good reason

2% down payment is questionable

20% on cash down-payment is good reason

c) Purchasing plasma is questionable

d) Good reason

e) Good reason

Q10) John should carry out his transactions from his credit card on or after the 16 th of each month. This
is because by doing so, his credit card bill will be generated on the 15 th of the next month and his
payment due date will be 7th of next to next month. In this case, john will get more time for paying his
credit card bills. In order to avoid any late fee charges, he must make payments on the 7 th of every
month.

Q11) making a minimum amount due payment on the credit card will just reduce the current month’s
outstanding balace but it wont lower your debt. Even if you decide to discontinue using your credit card
further until you have paid the full bill amount, the debt will still keep on accumulating due to the
revolving credit facility you were provided with. In case of revolving credit, you can re-pay the
outstanding amount by paying the monthly minimum amount due to the issuer. You have a choice to
make payments whenever you want to till you pay the full amount. Any payment that is less than the
total due amount will definitely attract interest rate and if you pay only the minumim amount, it will
take you years to pay the full due amount. It is advised that he should repay the full credit card dues
within the credit-free period available to him and should avoid making minimum amount due payments.

Q12) I will definitely discuss over the metnioned topic with my to-be-spouse as it is very important to
know if your partner is interested in saving for future goals and targets or if he/she is a person who liked
to spend a lot. It is important to discuss such topics as this can help both of the individuals learn the
importance of reducing expenses and increasing savings. This can help us save more for future when we
will have kids and we will have to pay their college and university fee and bare other expenses. So its
important to know if your partner is more of a spender or a saver.

Q13)

For the Month of November

a) Amount of cash received $2,000
b) Actual debt payments $150
Ratio = b/a 7.5%
Yes the above tool is useful at this stage of my life. I am below the 15% threshold. This is because I have
less debt obligations on me and more cash on hand. Actually I always try to limit my debt payments and
pay them off as soon as I get a chance as it becomes very hard to pay them off when they start
accumulating so I usually stay below 15%.

Q14) Monthly Budget:

Hair cut- $8/-

Audible -$10/-
Movies -$15/-
Food outside + snacks - $40
Face-wash, shampoo, soap, Body lotion, cosmetics- $10
Electronic items + stationary - $25
Clothes - $35
Mobile Bill - $13
Other expenses -$20

Total Expenditure- $176

Pocket money (Available funds) -$200

This budget exercise is very helpful as it teaches us how to manage our money efficiently and utilize
the funds available to us. We should spend on more productive and useful needs more instead of
spending it on luxury activities or unnecessary activities.

Q15) Name: First Century Bank

Date: 10th-nov-2020
No fee is charged to the checking account. A checking account is a kind of current account
in which you are not required to keep a minimum balance. It can be zero too.

Q16) Pay to the order of: Mary Doe

Amount: $100
In words: One hundred dollars only

Mary will have to personally visit the bank to cash the check. She might be asked to provide ID
to bank agent to verify if the check was originally written to her.

Q17) money John will have 5 year from now = $ 11,040.81

Money with John having now= $10,000

Interest rate in Saving Bank =2.0%
Deposit time= 5 years
Money John will have 5 year from now = Present Value*(1+Saving Interst Rate)^No of years of
deposit
=$10,000*(1+2%)^5
=$11,040.81

motorcycle cost after 5 years = $ 12,762.82

Current cost of Motorcycle= $10,000

Inflation Rate=5.0%
Time Period=5 years
Motorcycle cost after 5 years will be = Present Value*(1+Inflation Rate)^No of years
   =$10,000*(1+5%)^5
=$12,762.82

Q18) cost to my parents = $5

Cost to my grandparents = $0.2
Cost to me today = $15
Cost 30 years from now = $30

Q19) I believe Patricia should avail the services from the moving company instead of having her
friends help her in it because this in this way, you are paying for the insurance of your items. the
repair cost of the broken sprinkler system along with other damages could actually be more costly
for her as compared to the amount paid to the moving company. Also the moving company would be
able to carry out the shifting more appropriately as compared to her friends.

Q20) a) Currently I have vehicle-insurance for my car.

b)I am planning to buy health insurance in future.
c) Yes I will review my insurance needs with a professional as he/she will guide me which insurance
to plan in and how beneficial it would be for me. As an individual, I would have to consult an expert
to make sure I am investing my money in the correct place.

Q21) a) PEP manufactures a wide variety of beverages, foods and snacks. It has complementary
portfolio of brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. Some of the
products include Cheetos cheese-flavored snacks, Doritos tortilla chips, Fritos corn chips, Lay’s
potato chips, Ruffles potato chips, Tostitos tortilla chips, Cap’n Crunch cereal, Life cereal, Pasta
Roni, Quaker Chewy granola bars, Quaker grits, Quaker oatmeal, Quaker rice cakes, Quaker simply
granola and Rice-A-Roni side dishes, Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, Mountain
Dew, Pepsi, Propel, Sierra Mist and Tropicana and many more.

b)Yes, I do like Pepsico’s business because the most of the products produced by the company are
of high quality and great taste and they are always introducing more and more variety in the existing
products. There is a lot of room for growth as the company has been taking various steps including
investments in new plants, new lines, acquiring various food manufacturing brands, increased use of
e-commerce websites and mobile commerce applications and added distribution infrastructure et
cetera.

Q22) Hi = $144.74

Low = $142.76

Close = $143.84

Change = 0 (0.00%)
Volume = 894

Intraday High is the highest price at which a security trades on a specific trading day.
Intraday Low is the lowest price at which a security trades on a given specific day.
Previous Close is a security's closing price on the preceding time period of the one
being referenced
Change in the stock market is a shift in the value of a security to either a higher or lower
level
Volume measures the number of shares traded in a stock.

Q23) Yes, it did pay a dividend.

The amount of dividend per share was $3.79 on 11/14/19
The average dividend yield was $0.948.
Yes I find the dividend of Pepsico attractive as it pays a good amount on its dividend.

Q24) 3.77 / 5.20 = 72.5% in 2019.

I will definitely be happier on a dividend payout ratio of 75% because that means the
dividend per share given out would be higher too.
I believe a growing dividend is better as this is a sign of improvement of the company’s
financial health as well as better performance. Instead of giving out high dividends to
attract more investors, companies should focus on growing its dividends in order to
retain these investors.
Amount of dividend per share 10 years ago was $1.89 in 2010.
Q25) No this doesn’t really mean that I have made a great investment. This is because
if the company had invested the dividends distributed it could have generated better
returns and would have resulted in higher EPS.

Q26) 133.70 / 5.20 = 25.71 in 2019

The P/E ratio shows what the market is willing to pay today for a stock based on its past
or future earnings.

Q27) XYZ will pay 10000*6%=600 as interest every year till maturity and an additional amount of
10000 at the time of maturity

Q28) XYZ will pay 600 in Year 5

Q29) she could sell it for more as bond prices are inversely related to rates

Q30) XYZ will pay 10000*6%=600 as interest every year till maturity and an additional amount of
10000 at the time of maturity
Yield to maturity=5%

Q31) No benefit because they are not related to the company and the bond has fixed returns.

Q32) he will invest money in a savings account at a fixed rate for x period of time, for 1 month in this
case, that will be invested automatically in the next month. you get a lesser profit in this case but you
can access your money anytime and if you don’t withdraw your money, they are automatically
reinvested and you start getting interest on it.

Q33) Short term bonds give out less return due to low risk while long-term bonds have higher return
due to high risk associated to them. This is because in long-term bonds, your money stays locked for
longer period of time and the bond price keeps on fluctuating with the changing interest rates of the
market (inverse relation). If he wants the safety of his money, he should invest in the second option
that is bond maturing in 5 years as this means he can quickly get his money back at the end of the
5th year. But if John can afford higher risks then he should invest in long-term bonds that is the first
option where the bond would mature in 30 years.

Project 2

Advantages of Corporate Bonds

 The payments of corporate bonds are structured for investors which means they can get a
reliable source of income.

 As corporate bonds are classified as a debt, the bondholders are given the status of a
creditor and so are often ranked higher in comparison to other creditors at the time of
distribution of assets upon bankruptcy, so they have a better chance to recover their
investments.

 Consistent pricing structure helps stabilize a portfolio.

 You can even convert some corporate bonds into stocks and can sell these in the secondary
market easily at the current stock value. This could bring higher returns for investors.

 You usually get higher returns on corporate bonds as the risk in these bonds is much higher
comparatively. This is the perfect option for those investors who are looking for a potential
reselling opportunity in the secondary market

 You get a predictable source of income which means you can easily plan in advance for the
payments you will receive.

Disadvantages of Corporate Bonds

 Corporate bonds do not provide capital growth

 Risk of default is a major drawback. Companies at times default on their bonds as they fail to
pay their bills and so the bondholder might not be able to recover his/her initial investment
easily

 It is quite difficult to sell these bonds as other investors want to make a profit off their
investments which results in losses for the initial investor. In order to minimize losses, the
initial investor would have to wait till interest rates rise enough

 There are fewer buyers in the secondary markets than in the primary markets due to the
repayment structure of a corporate bonds. Selling corporate bonds in the primary market is
quite time-taking

 Corporate bonds are based on the current interest rates in the market

 You need a large investment to purchase a corporate bond

Advantages of stocks
  Stocks are usually the outperforming investment opportunities as large fortunes can be
made just by purchasing a few high quality stocks and holding them for a longer period of
time. There is no limit on the amount you will gain from these stocks so with increases
financial success, you can get higher returns too.

 Although inflations fluctuates time to time but stocks usually keep on rising over time

 Buying stocks can give you a partial ownership in the company and as an owner, you can
have a share in its financial growth and success.

 Stocks are excellent vehicles for retirement plans especially for those who have around 30-
35 years of service left

 You don’t have to suffer from the impacts of the problems arising outside the stockholder’s
financial investment as you are a passive holder of stocks.

 You can sell stocks anytime you want to and buy more stocks at any time.

Disadvantages of stocks:

 Stocks are very volatile. The share price can vary on daily basis and the factors affecting this
are usually not very easy to control

 When companies go out of business, their stocks become worthless and so you lose money

 You have to bare a brokerage commission cost when buying and selling stocks.

 The process of working out on which company has the best quality stocks is quite time-
taking.

I believe the best option for Kevane is to invest in stocks as they are much safer. No companies go
bankrupt on daily basis and a company closing down all of a sudden is quite rare.

Project 1

Three things that I will do differently after taking this seminar are the following:

 One should never invest in anything that he/she doesn’t understand or isn’t comfortable with.
If you are not able to thoroughly understand the investment opportunity and analyze its pros
and cons, you should never think of investing your money into it as you might face major
losses due to lack of knowledge about the action plan or strategies to implement on for
getting expected returns. Until and unless you are lucky enough to get high returns without
having to do or know much, the probability of losing your money as well as your peace of
mind are high in this scenario.

 One shouldn’t just try to become the richest or the smartest investor in the town by listening
to the advices from your friends. You are here to reach your ultimate goal that is becoming
financially independent and not to show off how creative or smart you are. You shouldn’t get
influenced by your so-called ‘successful’ investments friends until and unless you have
thoroughly and objectively analyzed their comments and identified if they have merit and if
 they are good for you or not. Your education and skills should act as your strengths in
carrying out these financial investments or activities. I believe there is none other than you
yourself who can manage your money in the most effective way. There might be your
friends, stockbrokers, financial advisors out there who might present you with ready-made
attractive advices but you should know that what your money means to you wouldn’t mean
the same to any of them. They might help you in the decision making process but the final
decision should always be yours which should definitely be made on the basis of your
education.

 One should always lookout for ways to diversify his/her portfolio or investments. Looking
back to the late 1990’s when a lot of investors had invested a huge proportion of their money
into technology stocks, they had to face severe financial losses when the industry collapsed.
Investors who instead had their investments diversified, or divided into different investment
opportunities, stayed secure and were able to cater these fluctuations in the markets much
easily. The most common method of obtaining diversification is asset allocation which
suggests or guides us on how to allocate investment assets between different opportunities
including stocks, bonds, real estate and other such types and how this varies from individual
to individual on the basis of their age, financial resources, personal family circumstances and
the willingness to take and absorb risk. Through diversifying your investments, you can
secure yourself as when one platform is down, you can rely on the other for income returns.

Project 3

Owning a business is rewarding but it definitely requires a great deal of patience and hard work in
order to be successful. One has to work for extended hours in order to achieve business goals and
objectives. One has to invest more hours in business as compared to the number of hours he/she
has to put in their corporate job and should know that there are no free Saturdays anymore once you
start your own business. Other than the extra hours one has to put in, there are a couple of ‘worry
time’ hours too that are to be put in when things are not turning out according to your expectations.
So in order to operate a personal business effectively, one needs to ask him/herself if they can
actually afford all this or not. Secondly, it is important to have adequate business knowledge. You
should ‘think’ you like the business and ‘know’ that business at the same time. One way to get to
know the in-depths of the particular business you are planning to run it to either carryout an
extensive amount of research on it and gather first-hand experience in the field by working directly in
a company that is involved in similar operations. This would not only equip an individual with the
needed information but would also train him/her and teach him/he the specific skills that are required
in the field. Other than this, one should know that business revolves around numerous financial and
other responsibilities such as salaries of employees, rent, meeting government compliance
requirements, taxes et cetera. If you’re not able to generate sufficient cash from your business to
fulfill all these obligations, you wouldn’t be able to survive in the long-run. The internet is full of
stories of successful entrepreneurs but we don’t often get to hear stories of those who faced
continuous failures before becoming global giants. So we need to learn from these stories and
should implement on similar strategies. You also have to consider several factors that would hinder
or provide an opportunity for growth to the business. You have to analyze carefully where to setup
your business in order to survive external forces and minimize risks that would slow down your
growth. Moreover, you need to have the right education/ knowledge and planning strategies to make
your business successful. Having a personal business brings you with different challenges that must
be known to you in order to make sure you are ready to design strategies to deal with them and let
your business thrive. Gaining knowledge about your business and its requirements is very easy, you
simply have to go through books and articles written by successful entrepreneurs and learn from the
tips they have shared. One you get the required knowledge, you need to design a proper business
plan before investing your money into it. You will be surprised upon knowing the opportunities,
threats, new ideas and all such stuff that can help you design an effective business plan. Summing it
up, you need to deal with several issues that will encounter you upon starting your own business
such as organization (business structure and its employees), financing (resources for your initial
investment and for further expansion, maybe in the form of a bank loan), marketing (promotional
activities needed to widen customer base) and management (having a competent and skilled
workforce to achieve objectives).