Requirements: The client has asked the firm to explain the concept of arbitrage as it relates to the fixed-income securities. You must develop a report that explains the arbitrage-free valuation framework and analyzes the availability of arbitrage opportunities in the U.S. corporate bond market. In the paper, * Explain the arbitrage-free valuation framework and the law of one price. * Illustrate a theoretical arbitrage opportunity for a corporate bond based on value additivity. * Using the spot rates you used in your Week 2 Yield Curve and Forecast Report, provide an analysis to the client on the arbitrage-free valuation of two bonds in the portfolio (use only non-convertible corporate bonds from the portfolio).     oThis should be presented as the sum of the present values of expected future values using the benchmark spot rates.     oCompare the arbitrage-free valuation to the current market value of the two chosen bonds. * State your conclusion as to whether an arbitrage-free opportunity exists for these two bonds. * Briefly explain the valuation process to determine if bonds with embedded options are priced correctly, or if there is an arbitrage opportunity for this type of bond.    oInclude in your explanation how to use a binomial interest rate tree in the valuation process. *Research and review at least two articles about arbitrage opportunities in the U.S. corporate bond market. Based on these articles, * Analyze the availability of arbitrage opportunities in the U.S. corporate bond market. * Summarize the opportunities and risks of seeking and implementing bond trades to execute an arbitrage opportunity.

In this discussion, you will have an opportunity to make connections between your prior knowledge and the new content you are learning this week. Use your results from this week’s Build Your Proficiency Diagnostic to provide context for your prior knowledge and consider the new content about stocks, bonds, mutual funds, and other investment types as you respond to this discussion prompt.Last week, you considered how much money you might need in retirement. This week, you will learn about investment options to help you save for the future. Consider the investment options discussed this week (stocks, bonds, mutual funds, real estate). How would you choose to invest your retirement savings (stocks, bonds, mutual funds, other)? Why did you choose that option(s)?What are the advantages of investing in mutual funds?Section 13.1 of Personal Finance lists types of investment companies that offer mutual funds. Which of these would be of most interest to you? Why? The answer to this is A real estate investment trust and I would attach a short summary of this and you can answer this question based on that.Real Estate Investment TrustsA real estate investment trust (REIT) is a special type of closed-end fund that invests in real estate and mortgages. By law, a REIT must have a buy-and-hold investment strategy, a professional manager (the trustee), and at least 100 shareholders. The trustee initially issues shares and then uses the investors’ money to buy real estate assets according to the terms of the trust, much like a unit investment trust. The difference is that the REIT doesn’t have a limited life span, because most real estate investments don’t have fixed maturities. An important factor for individual investors is that REITs must distribute 90 percent of their profits to shareholders each year, and this income will be taxable as ordinary income unless the shares are held in a tax-deferred account.REITs offer individual investors the opportunity to diversify their investment portfolios into real estate. Many investors wouldn’t otherwise have access to this investment class because of the high initial investment required and the liquidity risk involved. In many respects, REITs are similar to stock investments and closed-end mutual funds, trading on national exchanges and distributing profits to the investors through dividends. REITs often specialize in particular types of real estate investments. Equity REITs, which make up a large share of the market, specialize in making direct investments in income-producing real estate, such as office buildings and shopping centers. Mortgage REITs focus on mortgage investments, such as residential and construction loans.REITs can provide diversification for your portfolio because their prices do not tend to go up and down at the same time as stock and bond prices. However, they aren’t as liquid as stocks and are highly sensitive to the real estate market environment. In the early 2000s, REIT investors benefited from the real estate bubble, earning higher returns than investors in most other asset classes. But when real estate prices plummeted later in the decade, contributing to the 2008 financial crisis, REIT investors were badly affected. As shown in Figure 13.1, the average equity REIT lost about two-thirds of its value between April 2007 and February 2009, much more than the decline in the stock market over that period. Fortunately for investors, as the economy recovered and real estate prices stabilized, REIT shares returned to their pre-2008 values.

Search the Internet and watch the first 6 minutes of PBS Idea Channel’s video: Are Bitcoins and Unusual Hats the Future of Currency?Consider the functions of money as well as the risks inherent in traditional fiat currency. After watching the video, consider the following questions: Do alternative currencies have real world worth? What are the pros and cons of the expanding popularity and acceptance of these forms of money?only need 3-4 sentences