I. Calculate the return of the chosen stock for the two weeks prior to the news, the day of the news, and the two weeks after the news. Show your work tosupport your response.II. Explain whether the news article had the impact on the stock price that you expected.III. Calculate the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks afterthe news. Show your work to support your response.IV. Explain how the actual impact of the news on the bond yield aligned with your initial expectation after reading the news article.
FIN 340 Module Six Journal Guidelines and Rubric FIN 340 Module Six Journal Guidelines and Rubric Overview: This journal activity is private between you and the instructor. This assignment will allow you to assess the impact of news on stocks and bonds. News can affect stock and bond prices in significant ways. This is because news disseminates into the market at different speeds and with different levels of importance. As investors, you need to think about how information flows through market participants and into securities. Surprise news can jolt the market up or down, whereas gradual dissemination can result in a slow buildup or deterioration in prices/yields. Additionally, market participants sometimes build expectations beforehand, and prices react differently than people expected because the news did not meet or exceed expectations. All of these dynamics can supply important information to apply to an investor’s portfolio decisions. Prompt: Complete both of the following scenarios: 1) Choose a stock from list below: International Business Machines Corporation (IBM) The Coca-Cola Company (KO) Bristol-Myers Squibb Company (BMY) Oracle Corporation (ORCL) 3M Company (MMM) Baxter International, Inc. (BAX) Big Lots, Inc. (BIG) Netflix, Inc. (NFLX) Akamai Technologies, Inc. (AKAM) General Electric Company (GE) Then, go to Yahoo! Finance or another website and find a news article that you believe would impact the company’s stock price. Calculate the return of the chosen stock for: The two weeks prior to the news The day of the news The two weeks after the news Explain how the actual impact of the news on the stock price aligned with your initial expectation after reading the news article. 2) Choose a significant economic report (unemployment, GDP, etc.) or Federal Reserve Open Market Committee announcement. https://finance.yahoo.com/ Then, use Yahoo! Finance to research the historical pricing of the CBOE 10 year treasury yield (symbol: ^TNX). Calculate the percentage change for: The 2 weeks prior to the news The day of the news The 2 weeks after the news Explain how the actual impact of the news on the bond yield aligned with your initial expectation after reading the news article. Be sure to show your work to get full credit for these calculations. Specifically the following critical elements must be addressed: I. Calculate the return of the chosen stock for the two weeks prior to the news, the day of the news, and the two weeks after the news. Show your work to support your response. II. Explain whether the news article had the impact on the stock price that you expected. III. Calculate the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks after the news. Show your work to support your response. IV. Explain how the actual impact of the news on the bond yield aligned with your initial expectation after reading the news article. Rubric Guidelines for Submission: Your journal assignment should be two to three paragraphs in length and address all of the critical elements. It should also cite at least two sources using APA format. Consider utilizing the required readings, as well as recent news articles. Submit journal assignment as a Word document. Critical Elements Exemplary Proficient Needs Improvement Not Evident Value Return Calculates the return of the chosen stock prior to the news, the day of the news, and after the news, supporting each calculation by showing the work involved with no errors (100%) Calculates the return of the chosen stock prior to the news, the day of the news, and after the news, but calculations contain errors, or work to support calculations is not shown (75%) Does not calculate the return of the chosen stock prior to the news, the day of the news, and after the news (0%) 20 Impact Meets “Proficient” criteria and demonstrates a deep understanding of the topic (100%) Explains whether the news article had the impact on the stock price that was expected (85%) Explains whether the news article had the impact on the stock price that was expected, but explanation is inaccurate and/or incomplete (55%) Does not explain whether the news article had the impact on the stock price that was expected (0%) 25 https://finance.yahoo.com/ Treasury Yield Calculates the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks after the news, supporting each calculation by showing the work involved with no errors (100%) Calculates the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks after the news, but calculations contain errors, or work to support calculations is not shown (75%) Does not calculate the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks after the news (0%) 20 Bond Yield Meets “Proficient” criteria and demonstrates a deep understanding of the topic (100%) Explains how the actual impact of the news on the bond yield aligned with the initial expectation after reading the news article (85%) Explains how the actual impact of the news on the bond yield aligned with the initial expectation after reading the news article, but explanation is inaccurate and/or incomplete (55%) Does not explain how the actual impact of the news on the bond yield aligned with the initial expectation after reading the news article (0%) 25 Articulation of Response Meets “Proficient” criteria and is presented in a professional and easy-to-read format (100%) Journal assignment is well-organized, clear, concise, convincing, and free of errors in spelling, syntax, or grammar, with relevant sources that are authoritative and properly cited (85%) Journal assignment has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (55%) Journal assignment has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 10 Total 100% FIN 340 Module Six Journal Guidelines and Rubric Rubric