Financial Decision Making Summative Assessment

PURPOSE - The purpose of this assessment is to:

• Learn the importance of financial decision making within a management context;
• Weigh risks and rewards associated with equity investing;
• Understand various strategies for investing in financial markets;
• Understand the tools available for evaluating stocks as potential investments.

TASK/ASSIGNMENT -

Students will be participating in a stimulated stock market trading for approximately two months. Below are the procedures for the assignment, which students should read carefully. Failure to meet all the requirements of the game will negatively affect the grades on the project. During the two-month period, teams are to maintain a portfolio record, including the transaction information, the meaning of various tools that are used to analyse companies' financial performance.

Students are then expected to write a report on the overall financial decisions by teams, analyse and discuss the corporate financial situations, present a conclusion and recommendations for the companies to make future financial decisions.

Please note that the main purpose of this assessment is to create more opportunities to look into corporate finance with real-life cases. Better understanding of the financial situations does not necessarily leads to the success in your investments (Certainly, you are encouraged to explore investment as another specific area!).

DESCRIPTION

1. A team will be given a hypothetical USD 3,000,000 to invest in shares of public-listed companies (USD 1,000,000 for each person, assuming there are four members of the team).

2. To set up your online portfolio:

• Go to Investopedia website
• Register an account with Investopedia and, enter the registration information requested.
• Once you have received the confirmation email, use your email address and password to login into your Investopedia account.
• Click join the group and find your class group,
• Inform your lecturer about your ID of Investopedia.

3. Each team member must invest in at least five companies over the course of the game, with new company introduced to the portfolio each week. It is encouraged that team members consult each other before decisions are made, and construct the portfolio with group efforts.

4. Each team member must research at least one of the invested public-listed companies, providing a case study. Be sure to include the following components:

• A company profile, i.e., history, what they produce and other basic information;
• Relevant financial information, including but not limited to information from financial statements and interpretation, capital structure, dividend policy and recent stock performance;
• Further analysis on the financial status of the company, and recommendations for enhancing the performance if there is any.

5. To start purchasing stock, go to the Dashboard and click buy/sell stock.

6. You will track your stocks (Corporate finance performance) weekly, record the results in your transaction register, and submit the register through Moodle each week (the following Monday before 11:55 pm).

7. Please note that your grade will not be based on how your "investments" performance, i.e., whether or not you make money. Eight weeks is a brief time in the life of the stock market. The purpose of the assignment is to develop an understanding of the financial performance of public-listed companies and to utilise financial analytical tools. However, extra credit (up to 5%) may be awarded to the top two teams in the class, provided they have met all of the criteria per rubric.

8. This is a collaborative learning opportunity. Peer assessment is COMPULSORY for this group assignment. Fail to complete the peer assessment may lead to information asymmetry between the lecturer and learners, and learners will take the full responsibility for the possible consequences.

A peer assessment survey will be sent to learners near the completion of each group assignment. Learners are required to assess each member of the group to accomplish the peer assessment process. The group grades could adjust according to the peer assessment result (up to 10% of the assignment grade).

9. Please include and sign the cover sheet (attached) when you are submitting your work.

REPORT STRUCTURE -

Title Page -

• Include the title of the team, names of the team members, date of submission.

Executive Summary -

• Provide a summary of the report including your financial decisions in the current financial market environment, key findings on the investigation on the chosen public-listed companies and major recommendations.

Introduction and Aim/s - The aims of the project should be clearly set out.

• Provide background situation of the invested corporations, the applied analytical tools, and investment outcomes.

Investment Strategies -

• Based on the results of literature review, explain which and how the financial tools have been used.
• Specify the investment strategies applied for the project, provide rationales for adopting the strategies, and briefly introduce the results of the strategies.

Findings and Discussion - To use the results, you are expected to present one corporation that you have chosen to invest on.

• Summarise the outcomes of the simulated investments, select from various valuation model to analyse variations of the equity prices.
• Describe the capital structure of the corporation, overall cost of capital and briefly discuss major factors which will influence the amount of additional debt/equity finance that the company will be able to raise;
• With the holistic view of financial decision making, explain and evaluate the corporation's financial decisions, investment decisions and dividend policy over the last fiscal year(s).

Recommendations -

• Make recommendations and/or justify appropriate financial decisions for the investigated companies, investment decision, and dividend policy.
• Direct linkage between the recommendations and research findings should be clearly demonstrated.

Reflection - Reflect on your learning over the project activities at different levels:

1. Knowledge/Skills for making financial-related decisions.

2. Capability development

Register -

• Use the financial analytical tools introduced during that week to justify your investment decisions. All registers will be given feedback in the following week after submission. Please do refer the feedback and improve the following work.
• Keep a record of the survey journey and develop your reflection near the end of the study.

List of References -

• Identify a list of references you have directly referred to as either quote or paraphrased in completing your research project.
• APA 6th referencing style, both in-text referencing and the bibliographic list is required throughout.

Attachment:- Assignment File.rar