INVESTMENT ANALYSIS
Unit Reference Number R/615/3236
Unit Title Investment Analysis
Unit Level 7
Number of Credits 20
Total Qualification Time (TQT) 200 Hours
Guided Learning Hours (GLH) 100 Hours
Mandatory / Optional Mandatory
Unit Grading Structure Pass / Fail
Unit Aims
The aim of this unit is to develop learners’ understanding of investment theories and market equilibrium models and includes the requirement to perform bond valuations and evaluate current investment performance.
On successful completion of this unit, learners will be equipped with the skills to critically assess the cause and effect of developments on the world’s capital market. Learners will be able to make effective recommendations for future investments.
Learning Outcome – The learner will: Assessment criterion – The learner can:
1. Understand different types of securities. 1.1 Explain types of securities and associated concepts.
1.2 Evaluate key characteristics of each type of security.
2. Understand the regulation of security trading and new issues in world markets. 2.1 Explain regulations and procedures used in trading securities.
2.2 Analyse the policies and procedures relating to the trading of securities and new issues in world markets.
2.3 Assess issues in global markets including the London Stock Exchange.
3. Be able to apply principles of investment theory, securities and market analysis. 3.1 Explain the principles of investment theory
3.2 Evaluate the use of securities.
3.3 Critically assess the underlying concepts of market analysis and efficiency.
4. Understand the principles of taxation. 4.1 Explain indirect and direct taxes.
4.2 Analyse the characteristics of indirect and direct taxes.
4.3 Assess the principles of taxation and their implications for relevant stakeholders.
5. Understand the laws and regulations controlling the financial services industry. 5.1 Explain laws and regulations controlling the financial services industry.
5.2 Evaluate a range of risk mitigation methods used in investments.
5.3 Analyse practical risk mitigation methods.
6. Be able to plan, manage and assess client portfolios. 6.1 Explain client portfolios in accordance with customer profiles.
6.2 Make justified recommendations of appropriate types of savings and investments.
6.3 Critically assess issues relating to portfolio management.
Task 1 of 2 - Report (ACs 1.1, 1.2, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3)
Tim & Co is building a new factory in Yorkshire, England. They must pay a final construction payment of £ 9,000,000 in six months’ time.
Foreign exchange and interest rate quotations are as follows:
You can trade at the following prices:
Spot rate, euro € per British pound sterling £ €1.4876/£
One-year forward exchange rate €1.4906/£
One-year euro interest rate 4.10 %
One-year pounds’ sterling interest rate 3.55%
Prepare a portfolio of evidence that addresses the following questions.
1. Is covered interest arbitrage worthwhile? If so, explain the steps and compute the profit based on an initial transaction of £9,000,000. Briefly discuss your findings.
2. Identify laws and regulations controlling the financial services industry.
3. Assess the principles of direct and indirect taxation and review the implications on a range of business stakeholders.
4. Evaluate the key characteristics of different types of securities and assess the strengths and weaknesses of the securities.
Delivery and submission: x 1x Report - 3000 words
Referencing:
x Each section must reflect any supporting Harvard style citations.
x A comprehensive Harvard style reference list must be included at the end of the work.
Task 2 of 2 - Presentation (ACs 2.1, 2.2, 2.3, , 3.1, 3.2, 3.3, 6.1, 6.2, 6.3)
Air UK & Co PLC is an airline service company listed on the London Stock Exchange (LSE) and is based in the UK.
It is a low-cost carrier and has firmly established itself as the UK’s leading low fares scheduled passenger airline.
The primary objective of Air UK & Co is to offer airline services at low fares to generate more passenger traffic, whilst maintaining the focus on cost containment and operating efficiencies.
As the strategies, they developed have stimulated demand, Air UK and Co is now looking to invest in another listed company on the LSE which belongs to the economy / value class airline services and provides passengers with an economy class air travel experience.
For this assignment, you are the finance manager of Air UK and Co and are required to develop the business proposal presentation.
Prepare a comprehensive presentation to assess the viability of the business expansion project.
The following requirements need to be addressed when preparing the presentation.
x Review the regulations, policies and procedures used when trading in securities.
x Identify, analyse and review issues in global markets including the London Stock Exchange.
x Evaluate the portfolio management in relation to the investment according to the customer profile and needs.
x Justify appropriate types of savings and investments for the hypothetical expansion of Air UK & Co airline services.
x Explain the principles of investment theory and evaluate the use of securities.
x Demonstrate the underlying concepts of market analysis and efficiency.
Delivery: x 1x PowerPoint Presentation
x 1x set of speaker notes supporting each PowerPoint slide
Submission:
x 1x PowerPoint Presentation (circa 1000 words)
x 1x set of speaker notes supporting each PowerPoint slide 500 words
Referencing:
x PowerPoint Presentation must reflect any supporting Harvard style citations.
x A comprehensive Harvard style reference list must be included at the end of the presentation.
Evidence to be submitted: x Report - 3000 words
x Business Presentation - 1000 words x Presentation speaker notes – 500 words.