FIN 685 Milestone Two Guidelines and Rubric
The final project for this course is the creation of an analysis and recommendations paper that demonstrates what you have learned about risk management in a
real-world context. You will research a publicly traded company of your choosing and analyze it as a potential investment opportunity.
Prompt: In this milestone, you will submit a draft of the Risk Analysis section (III) and the Risk Management Strategies section (IV) of the final project. You will
analyze the different risks that the company faces and classify the risks (e.g., stand-alone risk, corporate risk, or market risk), which were discussed in Module
One and more specifically in Module Five. You will also analyze the impact of these risks in regards to the company’s internal and external environments. Lastly,
you will recommend risk management strategies that minimize the risk and maximize the return for the company. For example, you might think about whether a
company should reduce its use of debt or seek short-term or long-term financing options instead.
Specifically, the following critical elements must be addressed:
III.
Risk Analysis
a) What is a specific risk that you have identified as relevant to this company, its product(s), and its industry?
b) As which type of risk would you classify it? In other words, is it considered stand-alone, corporate, or market risk? Be sure to defend your
reasoning.
c) What do you feel is the impact of the risk with regard to the company’s external environment (i.e., economic trends, regulatory landscape, and
competition), as well as its internal environment (i.e., people, process, and infrastructure)?
d) To what extent do you feel this risk can be effectively balanced with return? Be sure to justify your reasoning.
IV.
Risk Management Strategies
a) What risk management technique do you feel would be most appropriately employed to minimize or mitigate the effect(s) of this risk? Why?
b) Similarly, what strategies might you suggest for maximizing return in the face of this identified risk? Why?
c) What recommendations would you make in terms of determining the effectiveness of these risk/return management measures over time? Be
sure to justify your recommendations.
Rubric
Guidelines for Submission: Your paper must be submitted as a 5- to 6-page Microsoft Word document with double spacing, 12-point Times New Roman font,
one-inch margins, and at least 3 sources cited in APA format.
Critical Elements
Risk Analysis: Specific Risk
Proficient (100%)
Reasonably characterizes risk
associated with the company, its
product(s), and its industry
Risk Analysis: Type
Classifies type of risk and
defends reasoning
Risk Analysis: Impact
Analyzes the impact of the
identified risk
Risk Analysis: Balance
Assesses the extent to which the
risk can be effectively balanced
with return and justifies
reasoning
Recommends risk management
technique for most appropriately
minimizing or mitigating the
effect(s) of identified risk and
explains why
Risk Management Strategies:
Technique
Risk Management Strategies:
Maximizing
Risk Management Strategies:
Effectiveness
Suggests strategies for
maximizing return in the face of
the identified risk and explains
why
Makes appropriate
recommendations for
determining effectiveness of
risk/return management
measures over time
Needs Improvement (75%)
Characterizes risk associated with
the company, its product(s), and
its industry, but response is
cursory, illogical, or inaccurate
Classifies type of risk, but
response is illogical, inaccurate,
or weakly defended
Analyzes the impact of the
identified risk, but response is
cursory or illogical
Assesses the extent to which the
risk can be effectively balanced
with return, but response or
reasoning is cursory or illogical
Recommends risk management
technique for minimizing or
mitigating the effect(s) of
identified risk, but
recommendation or reasoning is
cursory or illogical
Suggests strategies for
maximizing return in the face of
the identified risk, but suggestion
or reasoning is cursory or illogical
Makes recommendations for
determining effectiveness of
risk/return management
measures over time, but
recommendations are cursory or
illogical
Not Evident (0%)
Does not characterize risk
associated with the company, its
product(s), and its industry
Value
13
Does not classify type of risk
13
Does not analyze the impact of
the identified risk
13
Does not assess the extent to
which the risk can be effectively
balanced with return
13
Does not recommend risk
management technique for
minimizing or mitigating the
effect(s) of identified risk
13
Does not suggest strategies for
maximizing return in the face of
the identified risk
13
Does not make
recommendations for
determining effectiveness of
risk/return management
measures over time
13
Articulation of Response
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Submission has multiple 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
Earned Total
9
100%
FIN 685 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of an analysis and recommendations paper.
Risk management is the process of identifying, analyzing, and either accepting or mitigating uncertainty in investment decision making. Risk management occurs
everywhere in the financial world: when an investor buys low-risk government bonds over more risky corporate debt, when a fund manager hedges their
currency exposure with currency derivatives, and when a bank performs a credit check on an individual before issuing a personal line of credit.
As a financial analyst or advisor who may be advising organizations and/or individuals on effective investment strategies, it is crucial that you understand the
sources of risk and how to avoid, minimize, or mitigate risk in order to achieve the investor’s objectives.
The purpose of this final project is for you to demonstrate what you have learned about risk management in a real -world context. You will demonstrate through
this project your ability to comprehensively analyze a company as a potential investment opportunity, based on its level of risk and your knowledge of risk
mitigation and management techniques. This skill set will serve you well whether you are a managing within a firm, acting as an external consultant to an
organization, or handling your own personal investment strategies.
The project is divided into three 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, Five, and Seven. The final submission will occur in Module Nine.
In this assignment, you will demonstrate your mastery of the following course outcomes:
Determine appropriate asset allocation strategies for ensuring optimal portfolio diversification
Analyze organizational characteristics of potential investment opportunities for identifying investments that meet asset allocation and portfolio
diversification needs
Assess risk associated with potential investment opportunities for ensuring informed investment decision making that balances risk with return
Propose risk management strategies appropriate to business-specific scenarios for maximizing return
Select appropriate long-term investments from potential opportunities that minimize risk while maximizing return
Prompt
For this final project, you will research a publicly-traded company of your choice to analyze it as a potential investment opportunity. In your analysis, you will
examine risk and techniques for managing it, and synthesize your research and analysis in determining if the company is a feasible investment opportunity.
Specifically, the following critical elements must be addressed:
I.
Introduction: Provide a brief overview of the company you have selected with regard to its potential as an investment opportunity. Be sure to include
the following items in your overview:
a) What is the size of the company relative to other companies in the industry, both currently and historically?
b) What is the company’s leadership position in its industry? In other words, is this company considered a leader or a follower? Be sure to defend
your response.
c) What is the financial position and profitability of the company, both currently and historically?
d) Analyze the company’s major product lines. How important are these major products in generating the company’s revenues? What level of
success have the products enjoyed in the marketplace? What is the implication of this on the feasibility of the company as a potential
investment opportunity? Consider discussing the interrelationship among product lines, revenue, and investment potential, and be sure to
defend your reasoning.
II.
Investment Analysis
a) What is the perception in the market of this company’s stock?
b) How would you view this stock as an individual investor? Why?
c) What asset allocation strategy might you recommend for including this company’s stock in a portfolio? Be sure to justify your
recommendation(s).
d) How do you feel a portfolio manager would treat this stock and others from the same industry from an asset allocation perspective? What leads
you to this conclusion?
III.
Risk Analysis
a) What is a specific risk that you have identified as relevant to this company, its product(s), and its industry?
b) As which type of risk would you classify it? In other words, is it considered stand-alone, corporate, or market risk? Be sure to defend your
reasoning.
c) What do you feel is the impact of the risk with regard to the company’s external environment (i.e., economic trends, regulatory landscape, and
competition), as well as its internal environment (i.e., people, process, and infrastructure)?
d) To what extent do you feel this risk can be effectively balanced with return? Be sure to justify your reasoning.
IV.
Risk Management Strategies
a) What risk management technique do you feel would be most appropriately employed to minimize or mitigate the effect(s) of this risk? Why?
b) Similarly, what strategies might you suggest for maximizing return in the face of this identified risk? Why?
c) What recommendations would you make in terms of determining the effectiveness of these risk/return management measures over time? Be
sure to justify your recommendations.
V.
Feasibility as an investment opportunity
a) Calculate one standard financial ratio from each of the broader categories of leverage, liquidity, operating, profitability, and solvency ratios for
the company.
b) Compare the ratios you calculated for your company to those of its competitors/industry average, and identify discrepancies that you find. For
example, an analysis of Coca Cola should include a comparison with PepsiCo, since these two companies are similar in size and scope.
c) Analyze the ratio discrepancies between your selected company and its competitors, and explain why you feel these discrepancies exist, as well
as their impact on the company’s potential as an investment opportunity. Be sure to defend your reasoning.
d) What do you feel are your selected company’s strengths and weaknesses as a potential investment opportunity? What is it doing well? What do
you feel are some areas in need of improvement? Be sure to defend your rationale.
VI. Conclusion: Based on your overall analysis, would you recommend your selected company as an investment opportunity over its competitors ? Be sure
to justify your rationale.
Milestones
Milestone One: Draft of Introduction (Section I) and Feasibility (Section V)
In Module Three, you will submit a draft of the Introduction section (I) and the Feasibility section (V) of the final project. In Milestone One, you will introduce
the company, its leadership, products, and services. Additionally, you will run a financial ratio analysis (picking one ratio in each category of ratio) and compare
the results to an industry peer’s ratios. You will then analyze the strengths and weaknesses of the company based on the ratio analysis. This milestone is graded
with the Milestone One Rubric.
Milestone Two: Draft of Risk Analysis (Section III) and Risk Management Strategies (Section IV)
In Module Five, you will submit a draft of the Risk Analysis section (III) and the Risk Management Strategies section (IV) of the final project. In Milestone Two,
you will analyze the different risks that the company faces and the impact of these risks in regards to the company’s environment. Additionally, you will
recommend risk management techniques that minimize the risk and maximize the return for the company. This milestone is graded with the Milestone Two
Rubric.
Milestone Three: Draft of Investment Analysis (Section II) and Conclusion (Section VI)
In Module Seven, you will submit a draft of the Investment Analysis section (II) and the Conclusion section (VI) of the final project. In Milestone Three, you will
evaluate the perception of the company’s stock and offer recommendations on this stock to potential investors and portfolio managers. Additionally, the study
will provide a conclusion and overall recommendation as to whether the company is a good investment opportunity. This milestone is graded with the Milestone
Three Rubric.
Final Submission: Analysis and Recommendations Paper
In Module Nine, you will submit your final project. 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. The final submission is graded with the Final Project Rubric.
Deliverables
Milestone
Deliverable
Module Due
Grading
One
Draft of Introduction (Section I) and
Feasibility (Section V)
Draft of Risk Analysis (Section III) and Risk
Management Strategies (Section IV)
Draft of Investment Analysis (Section II) and
Conclusion (Section VI)
Final Submission: Analysis and
Recommendations Paper
Three
Graded separately; Milestone One Rubric
Five
Graded separately; Milestone Two Rubric
Seven
Graded separately; Milestone Three Rubric
Nine
Graded separately; Final Project Rubric
Two
Three
Final Project Rubric
Guidelines for Submission: Your analysis and recommendations paper should be 15–20 pages long. It should be formatted in 12-point Times New Roman font,
double-spaced, with one-inch margins. All citations and references should be formatted according to the most current APA guidelines.
Critical Elements
Introduction: Size
Exemplary
Meets “Proficient” criteria and
utilizes industry-specific
language to establish expertise
(100%)
Proficient
Describes the size of the
company relative to other
companies in the industry, both
currently and historically
(90%)
Introduction:
Leadership Position
Meets “Proficient” criteria and
utilizes industry-specific
language to demonstrate
expertise
(100%)
Assesses the company’s
leadership position in the
industry and defends response
(90%)
Introduction:
Profitability
Meets “Proficient” criteria and
utilizes industry-specific
language to demonstrate
expertise
(100%)
Describes the company’s
financial position and
profitability, both currently and
historically
(90%)
Needs Improvement
Describes the size of the
company relative to other
companies in the industry, both
currently and historically, but
response is cursory or inaccurate
(70%)
Assesses the company’s
leadership position in the
industry, but response or
defense is cursory, illogical,
inaccurate, or weak
(70%)
Describes the company’s
financial position and
profitability, both currently and
historically, but response is
cursory, illogical, or inaccurate
(70%)
Not Evident
Does not describe the size of the
company relative to other
companies in the industry, both
currently and historically
(0%)
Value
4.85
Does not assess the company’s
leadership position in the industry
(0%)
4.85
Does not describe the company’s
financial position and profitability
both currently and historically
(0%)
4.85
Introduction: Major
Product Lines
Meets “Proficient” criteria and
demonstrates exceptional insight
into the interrelationship among
product lines, revenue, and
investment potential
(100%)
Analyzes the company’s major
product lines in terms of the
company’s feasibility as an
investment opportunity and
defends reasoning
(90%)
Investment Analysis:
Perception
Meets “Proficient” criteria and
description reflects a particularly
insightful assessment of the
market’s perception of the
company’s stock
(100%)
Meets “Proficient” criteria and
demonstrates exceptional insight
into individual investing
(100%)
Reasonably characterizes the
perception in the market of the
company’s stock
(90%)
Investment Analysis:
Individual
Investment Analysis:
Asset Allocation
Strategy
Investment Analysis:
Portfolio Manager
Risk Analysis: Specific
Risk
Reasonably characterizes how
stock would be viewed from an
individual investor ’s viewpoint
and explains why
(90%)
Analyzes the company’s major
product lines in terms of the
company’s feasibility as an
investment opportunity, but
response or reasoning is cursory,
illogical, or weakly defended
(70%)
Characterizes the perception in
the market of the company’s
stock, but response is cursory or
illogical
(70%)
Characterizes how stock would
be viewed from an individual
investor ’s viewpoint, but
response is cursory, illogical, or
weakly defended
(70%)
Meets “Proficient” criteria and
Recommends an asset allocation Recommends an asset allocation
demonstrates exceptional insight strategy for including company’s strategy for including company’s
into the value of asset allocation stock in portfolio and justifies
stock in portfolio, but response
(100%)
recommendation
or justification is cursory or
(90%)
illogical
(70%)
Meets “Proficient” criteria and
Reasonably characterizes how a Characterizes how a portfolio
demonstrates exceptional insight portfolio manager would treat
manager would treat this
into the value of asset allocation this company’s stock and others company’s stock and others from
(100%)
from the industry from an asset the industry from an asset
allocation perspective and
allocation perspective, but
explains conclusion
response or explanation of
(90%)
conclusion is cursory or illogical
(70%)
Meets “Proficient” criteria and
Reasonably characterizes risk
Characterizes risk associated
demonstrates keen insight into
associated with the company, its with the company, its product(s),
risk identification and
product(s), and its industry
and its industry, but response is
classification
(90%)
cursory, illogical, or inaccurate
(100%)
(70%)
Does not analyze the company’s
major product lines in terms of the
company’s feasibility as an
investment opportunity
(0%)
4.85
Does not characterize the
perception in the market of the
company’s stock
(0%)
4.85
Does not characterize how stock
would be viewed from an
individual investor ’s viewpoint
(0%)
4.85
Does not recommend an asset
allocation strategy for including
company’s stock in portfolio
(0%)
4.85
Does not characterize how a
portfolio manager would treat this
company’s stock and others from
the industry from an asset
allocation perspective
(0%)
4.85
Does not characterize risk
associated with the company, its
product(s), and its industry
(0%)
4.85
Risk Analysis: Type
Meets “Proficient” criteria and
demonstrates keen insight into
risk identification and
classification
(100%)
Risk Analysis: Impact Meets “Proficient” criteria and
cites specific, relevant examples
of the impact of risk that
establish a robust context for the
analysis
(100%)
Risk Analysis: Balanced Meets “Proficient” criteria and
demonstrates exceptional insight
into balancing risk and return
(100%)
Risk Management
Strategies: Technique
Classifies type of risk, but
response is illogical, inaccurate,
or weakly defended
(70%)
Does not classify type of risk
(0%)
4.85
Analyzes the impact of the
identified risk
(90%)
Analyzes the impact of the
identified risk, but response is
cursory or illogical
(70%)
Does not analyze the impact of the
identified risk
(0%)
4.85
Assesses the extent to which the
risk can be effectively balanced
with return, but response or
reasoning is cursory or illogical
(70%)
Recommends risk management
technique for minimizing or
mitigating the effect(s) of
identified risk, but
recommendation or reasoning is
cursory or illogical
(70%)
Suggests strategies for
maximizing return in the face of
the identified risk, but
suggestion or reasoning is
cursory or illogical
(70%)
Makes recommendations for
determining effectiveness of
risk/return management
measures over time, but
recommendations are cursory or
illogical
(70%)
Does not assess the extent to
which the risk can be effectively
balanced with return
(0%)
4.85
Does not recommend risk
management technique for
minimizing or mitigating the
effect(s) of identified risk
(0%)
6.47
Does not suggest strategies for
maximizing return in the face of
the identified risk
(0%)
6.47
Does not make recommendations
for determining effectiveness of
risk/return management measures
over time
(0%)
6.47
Assesses the extent to which the
risk can be effectively balanced
with return and justifies
reasoning
(90%)
Meets “Proficient” criteria and
Recommends risk management
demonstrates exceptional insight technique for most appropriately
into risk management
minimizing or mitigating the
techniques
effect(s) of identified risk and
(100%)
explains why
(90%)
Risk Management
Meets “Proficient” criteria and
Strategies: Maximizing demonstrates exceptional insight
into balancing risk and return
(100%)
Risk Management
Strategies:
Effectiveness
Classifies type of risk and
defends reasoning
(90%)
Meets “Proficient” criteria and
demonstrates exceptional insight
into effectiveness measurement
(100%)
Suggests strategies for
maximizing return in the face of
the identified risk and explains
why
(90%)
Makes appropriate
recommendations for
determining effectiveness of
risk/return management
measures over time
(90%)
Feasibility: One Ratio
From Each
Accurately calculates standard
financial ratios from each
category for the company
(100%)
Feasibility: Compare
Compares calculated ratios for
the company to those of its
competitors/industry average
and identifies discrepancies
(100%)
Feasibility:
Discrepancies
Feasibility: Strengths
and Weaknesses
Conclusion
Articulation of
Response
Meets “Proficient” criteria and
cites specific, relevant examples
that establish a robust context
for the analysis
(100%)
Analyzes ratio discrepancies
between company and its
competitors and explains why
they exist and their impact on
the company’s potential as an
investment opportunity and
defends reasoning
(90%)
Meets “Proficient” criteria and
Analyzes selected company’s
cites specific, relevant examples strengths and weaknesses as a
that establish a robust context
potential investment
for the analysis
opportunity and defends
(100%)
rationale
(90%)
Meets “Proficient” criteria and
Explains if selected company
makes novel insights into the
would be recommended as an
company as an investment
investment opportunity over its
vehicle
competitors and justifies
(100%)
rationale
(90%)
Submission is free of errors
Submission has no major errors
related to citations, grammar,
related to citations, grammar,
spelling, syntax, and organization spelling, syntax, or organization
and is presented in a
(90%)
professional and easy to read
format
(100%)
Calculates standard financial
ratios from each category for the
company, but with gaps in
accuracy or detail
(70%)
Compares calculated ratios for
the company to those of its
competitors/industry average
and identifies discrepancies, but
with gaps in accuracy or detail
(70%)
Analyzes ratio discrepancies
between company and its
competitors, but response or
reasoning is cursory or illogical
(70%)
Does not calculate standard
financial ratios from each category
(0%)
3.88
Does not compare ratios or does
not identify discrepancies
(0%)
3.88
Does not analyze ratio
discrepancies between company
and its competitors
(0%)
3.88
Analyzes selected company’s
strengths and weaknesses as a
potential investment
opportunity, but response or
defense is cursory or illogical
(70%)
Explains if selected company
would be recommended as an
investment opportunity over its
competitors, but response or
justification is cursory or illogical
(70%)
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact
readability and articulation of
main ideas
(70%)
Does not analyze selected
company’s strengths and
weaknesses as a potential
investment opportunity
(0%)
3.88
Does not explain if selected
company would be recommended
as an investment opportunity over
its competitors
(0%)
3.88
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
(0%)
2.99
Earned Total
100%
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