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Investment Challenge 3

Investment Challenge 3. Kate Dohn, Oliver Yu, Johnathan DiBenedetto, and Jad Shraim. Retrospective Look. Client Demographics 60-40 preference Initial capital: $500,000 Other preferences. Retrospective Look (cont’d). Passive management Investment funds VEXMX WINDX FNCMX FSMKX

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Investment Challenge 3

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  1. Investment Challenge 3 Kate Dohn, Oliver Yu, Johnathan DiBenedetto, and Jad Shraim

  2. Retrospective Look • Client • Demographics • 60-40 preference • Initial capital: $500,000 • Other preferences

  3. Retrospective Look (cont’d) • Passive management • Investment funds • VEXMX • WINDX • FNCMX • FSMKX • DTLGX • Bond funds • VBTIX • VITBX • DVEBX

  4. Retrospective Look (cont’d) • Active management • Fund Criteria • Manager tenure • Expense ratio • Tax effects • Asset allocation and risk • Decision • VTSMX

  5. Current Focus • Explore the possibilities of a carry-trade • Possible securities options • Based on tenure • Calculate the Treasury Yield Curve returns • Based on three scenarios • Stable • Upward shift • Flatten

  6. Current Focus (cont’d) • External factors • News reports related to yield curve • Final Decision • Go through with it or not? • If so, how to implement?

  7. The Possibilities are Endless . . . • Short term options • SHY • Long term options • TLT

  8. Look into the Future • Scenario 1 • Curve stays dormant

  9. Look into the Future (cont’d) • Scenario 2 • Curve shifts upward

  10. Look into the Future (cont’d) • Scenario 3 • Curve flattens due to raise in interest rates

  11. Calculations for Scenario 3 $16.75

  12. News from the Grapevine • FOMC Meeting • The effects on yield curve • Short term • Long term

  13. Final Answer? • Decision • Go for it! • Reason • Yield curve works in favor

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