FIN305e

End-of-Course Assessment – January Semester 2014

Financial Markets and Instruments

__________________________________________________________________________________________

INSTRUCTIONS TO STUDENTS:

1. This End-of-Course Assessment paper comprises EIGHT (8) pages
(including the cover page).

2. You are to include the following particulars in your submission: Title, Your PI, Your Name, and Submission Date.

3. As the End-of-Course Assessment is in lieu of an examination, late submission will NOT be accepted by the University.
4.
IMPORTANT NOTE

ECA Submission Deadline: 30 April 2014, 12 noon

ECA Submission Guidelines

Please follow the submission instructions stated below:

A - What Must Be Submitted

You are required to submit the following THREE (3) items for marking and grading:

• A Report (you should submit this item first as it carries the highest weightage).

• A Video Presentation: o UniSIM conducts Walk-in Clinic Sessions on how to record ECA video presentation for SBIZ students every semester. Please see MyUniSIM Blackboard L01 group for details.
o ECA video recording and submission online tutorials/guides are also available in MyUniSIM Blackboard at the FAQs tab under the category “Submitting End of Course Assessment [ECA]”.

• The set of Powerpoint slides upon which the video presentation is based.

Please verify your submissions after you have submitted the above THREE (3) items.

B - Submission Deadline

• The THREE (3) items of Report, Video and Presentation Summary are to be submitted by 12 noon on the submission deadline.

• You are only allowed a ONE-TIME submission for each of the THREE (3) items.

• As the ECA is in lieu of an examination, late submission of any of the THREE (3) items will NOT be accepted by the University.

• It will be taken that you have withdrawn from the course if o you failed the ECA due to late and/or non-submission of any of the THREE (3) items.
o the Report is not submitted on time.

C - How the (3) Items Should Be Submitted

• The Report: submit online to MyUniSIM (Blackboard) via TurnItIn (for plagiarism detection)

• The Video: submit online to MyUniSIM Blackboard (refer to MyUniSIM Blackboard at the FAQs tab under the category “Submitting End of Course Assessment [ECA])

• The Presentation Summary: submit online to MyUniSIM (Blackboard) (TurnItIn submission not required)
• Avoid using a public WiFi connection for submitting large video files. If you are using public wireless (WiFi) connection (e.g. SG Wireless at public areas), you might encounter a break in the connection when sending large files.
•
D - Additional guidelines on file formatting are given as follows:

1. Report • Please ensure that your Microsoft Word document is NOT of the type .docx as this is generated by Microsoft Word 2007 or higher version and it is NOT readable by earlier versions of Microsoft Word.

•
If you are using Microsoft Word 2007 or higher version, kindly ensure that you save your Report in .doc format so that your marker can read your Report.

2. Video Showing your powerpoint projection in the background is NOT required.

Your video file should be readable by current video player applications such as Windows Media Player and QuickTime Player.

Do ensure that your video file conforms to these requirements:
a) Time Duration: a minimum of 3 minutes and a maximum of 6 minutes
b) File Size: No more than 50MB
c) File Formats:
• .wmv (recommended)
• .mov

If we are unable to view your video file, we will treat it as nonsubmission of the video component.

Note: Please refer to the FAQs in MyUniSIM Blackboard under the category “Submitting End of Course Assessment [ECA]” for the following online tutorials/guides:
a) MyUniSIM Blackboard ECA Submission
b) Windows Movie Maker.

Under the sections “Online Tutorials”, computer-based training are available on how to use Windows Movie Maker to record ECA presentation video on your PC.


3. Presentation Summary • Please ensure that your Powerpoint slides are NOT of the type .pptx as this is generated by Microsoft Powerpoint 2007 or higher version and it is NOT readable by earlier versions of Microsoft Powerpoint.
•

If you are using Microsoft Powerpoint 2007 or higher version, kindly ensure that you save your Powerpoint slides in .ppt format so that your marker can read your Powerpoint slides.
•
The maximum number of slides is fifteen (15).
• Please do NOT download and use PPT slide design templates from the Internet.


E – Please be Aware of the Following:

Submission in hardcopy or any other means not given in the above guidelines will not be accepted. You do not need to submit any other forms or cover sheets (e.g. form ET3) with your ECA.

You are reminded that electronic transmission is not immediate. The network traffic may be particularly heavy on the date of submission deadline and connections to the system cannot be guaranteed. Hence, you are advised to submit your work no later than the day before the date of submission deadline. MyUniSIM (Blackboard) will allow you to submit your work late but your work will not be marked. You should therefore not jeopardise your course result by submitting your ECA at the last minute.

Once you have submitted your ECA, the status is displayed on the computer screen.

Any extra files, missing appendices or corrections received after the cut-off date will also not be considered in the grading of your ECA.

F - Plagiarism and Collusion

Plagiarism and collusion are forms of cheating and are not acceptable in any form in a student’s work, including this ECA. Plagiarism and collusion are taking work done by others or work done together with others respectively and passing it off as your own. You can avoid plagiarism by giving appropriate references when you use other people’s ideas, words or pictures (including diagrams). Refer to the APA Manual if you need reminding about quoting and referencing. You can avoid collusion by ensuring that your submission is based on your own individual effort.

The electronic submission of your ECA will be screened by a plagiarism detection software. For more information about plagiarism and collusion, you should refer to the Student Handbook (Section 7.3.2). You are reminded that UniSIM takes a tough stance against plagiarism or collusion. Serious cases will normally result in the student being referred to UniSIM’s Student Disciplinary Group. For other cases, significant mark penalties or expulsion from the course will be imposed.

Video Presentation Evaluation Criteria

Note: Students will be assessed on the quality of the presentation and not the quality of the video recording. However, the recording is expected to have video and audio clarity. Showing your powerpoint projection in the background is NOT required.

Organisation of Presentation /8
•
Logical flow of presentation
• Posture: Standing, straight back etc…
• Body language:
– Hand gestures supporting oral arguments, etc…
Posture & Body Language /5
• Looking at the video camera
•
No reading of slides or notes or cue cards
Eye-Contact /5
Pace & Articulation /7
• Pace: Speaks neither too fast nor too slow
• Articulation: Oral expression is clear and confident in the presentation.
TOTAL /25


Presentation Summary Evaluation Criteria
•
Layout, clarity of text elements, colour blends, graphical enhancements
Format and Style of Slides /3
•
Proper flow - title page, introduction, body, results, recommendations / discussion points, conclusion/summary; quick to understand, free from grammatical errors
Clarity and Coherence /4
Creativity
• Ability to use creative elements to value-add to the presentation so as to enhance understanding and clarity of difficult concepts
TOTAL /10

SECTION A (Total 65 marks)

Question 1

Today is 3 January 2014, your first day at a new job after graduating with your degree in Finance. You report to the Treasury Head of a large local corporate. Your new boss wants to place a bid for a particular 180-day T-bill that settles on 15 January 2014. He has asked you to work out the price the company should bid for a discount yield of 0.29% p.a. You are worried as you have totally forgotten the mathematical formula for T-bills. However, you remembered your FIN305e instructor telling you about the discount pricing function in Excel and you get to work.

(a) Prepare to calculate the price using Excel and take one Excel print screen shot to demonstrate the inputs for calculation.
(3 marks)

(b) Calculate your answer above in per $100 of face value to the last 3 decimal.
(2 marks)

(c) You then remember that the financial markets have been very volatile lately. You decide that you want to impress your new boss by showing initiative on your first day of work. Examine other data that you think would be useful to your new boss by taking a screen shot of the data or by downloading the data. Write in a succinct 5 sentence note to your boss on the data you chose for his further consideration.
(5 marks)

(Word Limit: 200 words)

Question 2

A privately owned real-estate company is thinking of expanding. However, it is constrained by limited sources of capital. Its existing shareholders are very low-profile and have doubts about the merits of listing his company. You have been engaged as a financial consultant to this company.

(a) Analyse the advantages and disadvantages of listing the real-estate company from the perspective of your client. Explain the IPO process in Singapore.
(6 marks)

(b) Examine the Sponsor-REIT model in Singapore and its potential suitability for your client using at least two actual examples.
(6 marks)

(c) Discuss and conclude with your recommendation.
(3 marks)

(Word Limit: 800 words)

Question 3

A significant share of China’s international trade transactions are denominated in US dollars and changes in US dollars / renminbi exchange rate have enormous implications for the profitability and balance sheets of Chinese firms. Therefore, the Chinese government has essentially fixed the renminbi / dollar rate until July 2005 when the managed floating exchange rate regime was adopted. Thereafter, the renminbi gradually appreciated.

(a) Examine the initial successes of the managed floating exchange rate regime in the China context.
(5 marks)

(b) Analyse the current difficulties and challenges faced by China regarding this tightly managed floating exchange rate regime.
(5 marks)

(Word Limit: 600 words)

Question 4

On 17th September 2008, many individual investors of a structured product called “DBS High Notes 5” received a late night phone call from their banker, DBS Bank, warning them that their investments in this product could be potentially wiped out due to the collapse of Lehman Brothers. One of your elderly relatives invested in this product and had trouble comprehending how his seemingly risk-free investment in “DBS High Notes 5” could be linked to the collapse of Lehman Brothers.

(a) Explain to your relative, by analysing the structure and nature of the “DBS High Note 5” with a suitable diagram.
(10 marks)

(b) Examine the key risk triggers inherent in this structure.
(5 marks)
(c) With the benefit of hindsight, analyse and give your views on how this saga might or might not have been prevented.
(5 marks)

(Word Limit: 800 words)

Question 5

Below are four scandals in which traders have attracted infamy for their banks and for themselves.


1997 Barings Bank Nick Leeson
2008 Société Générale Jérôme Kerviel
2011 UBS Kweku Adoboli
2012 JP Morgan Bruno Iksil

(a) Analyse the events leading to each scandal and examine similarities among the four.
(6 marks)

(b) Examine the consequences and lessons learnt from the four cases. Analyse the need and effectiveness of regulations and suggest and how might such lapses be prevented in the future.
(4 marks)

(Word Limit: 1000 words)

SECTION B (Total 25 marks)

Prepare a video recording of your response to Question 3. The presentation should be of at least 3 minutes but not exceeding 6 minutes.
(25 marks)

SECTION C (Total 10 marks)

Prepare a set of Powerpoint slides upon which the video presentation is based.
(10 marks)

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