It Is September 2011 And You Have Been Retained By A Wealthy Private 2419250

/in /by

It is September 2011, and you have been retained by a wealthy private investor as a financial advisor to evaluate the Morgan Stanley ” Contingent Coupon Range Accrual Notes Based on the Performance of the S&P 500® Index due September 15, 2031″. Your client is doubtful about this security. In particular, this 20-year security pays an 8% interest rate, which seems astronomical in current market conditions with low interest rates, especially when compared to the low 2.86% interest of US Treasury securities. You have to write a detailed report on the matter to submit to your client. You are aware that this investor holds a PhD in economics, and so will have no problem understanding formal arguments, including simulations, if necessary. Therefore, you should not spare the necessary details of the analysis. The questions below are meant to guide your analysis, but do not limit yourself to answer these questions. Be creative and use your own judgement in determining other relevant issues to be included in your report. Due dates and other issues: Please, hand in two copies of your report by Day: Saturday, December 9 Time: 12:00PM Location: (A) Electronic Submission on Canvas (one copy in Document Preview:

BUS 35100 Pietro Veronesi FINANCIAL INSTRUMENTS Final Assignment Case Study: Morgan Stanley Contingent Coupon Range Accrual Notes Based on the Performance of the S&P 500® Index due September 15, 2031 Instructions (read them very carefully) It is September 2011, and you have been retained by a wealthy private investor as a financial advisor to evaluate the Morgan Stanley ” Contingent Coupon Range Accrual Notes Based on the Performance of the S&P 500® Index due September 15, 2031″. Your client is doubtful about this security. In particular, this 20-year security pays an 8% interest rate, which seems astronomical in current market conditions with low interest rates, especially when compared to the low 2.86% interest of US Treasury securities. You have to write a detailed report on the matter to submit to your client. You are aware that this investor holds a PhD in economics, and so will have no problem understanding formal arguments, including simulations, if necessary. Therefore, you should not spare the necessary details of the analysis. The questions below are meant to guide your analysis, but do not limit yourself to answer these questions. Be creative and use your own judgement in determining other relevant issues to be included in your report. Due dates and other issues: Please, hand in two copies of your report by Day: Saturday, December 9 Time: 12:00PM Location: (A) Electronic Submission on Canvas (one copy in this case) (B) Campus: Faculty Services, Office 448 (office closes at 5pm, and it is obviously closed on Saturday.) (C) Gleacher Center: Staff of MBA office in GC330 or faculty liason in GC 430. Office hourse are M – T: 930AM – 930PM; F: 930AM-9PM; S: 8AM – 5PM; Important Notes: (1) Please, do not hand in the final in my mailbox. I rarely check it. Return finals only as described above. (2) This is an individual exam with the same rules of homework: You are…

Attachments:

Bus35100-Fina….pdf