FINANCIAL RISK MANAGEMENT ASSIGNMENT -
Part A - Part A requires you to complete the modules of "Economic Indicators" and "Fixed Income" of Bloomberg Market Concepts (BMC), which takes about 4 hours (1 hour for "Economic Indicators" and 3 hours for "Fixed Income").
Notes:
1) The above "4 hours" only provides you an idea of the amount of time required. There is actually NO time constraint, so please take as much time as you need to complete the modules.
2) All the questions throughout the module (not only the questions at the end) will count towards your score, so please answer EACH SINGLE question carefully.
3) Highly Recommended: You will not be deemed Bloomberg Certified until you finish all four modules. While you have this free access on campus in our course, we highly recommend that you finish the 4 modules and get your BMC certificate so you can use it on your CVs/LinkedIn/job applications.
Part B - Background: Today is 8 September 2009. You have just taken over from Orange team as the portfolio manager of approximately a $1.1bn portfolio of debt issued to raise funds for various clients. The previous portfolio manager of the Orange team left the role suddenly and the following material has been made available to you for review, as you contemplate what needs to be done on 15 September when a range of transactions need to occur.
a. Gamebook as in June 2009
b. Economic Overview: June Quarter 2009 and September Quarter 2009
c. Orange team performance report: Quarter ended September 2009
d. Client Transactions: 15/9/2009
e. Client Hedging requirements: 15/9/2009
f. Borrowing rates for new advances: 15/9/2009
g. Spreadsheet decision aid: 15/9/2009
Task: As the new portfolio manager, your immediate task is to formulate a strategy for 15 September when a range of transactions need to occur. On that date you will have to ensure that you have sufficient cash to pay various third-parties, including clients who are seeking new advances, bond-holders and derivative counter-parties. This is likely to involve the issue of one or more securities.
You are also well aware that you are responsible for positioning the portfolio to achieve the lowest cost of funds in the future, the benefits of which you can then pass onto your clients in the form of lower borrowing costs.
Finally, your clients have various commodity and foreign exchange exposures that you must manage on their behalf.
Hand-in Requirements:
1. Strategy report. In this report, you need to explain the thinking behind the transactions that you plan to execute on 15 September 2009. Some of the things you may want to discuss include: the strategy and performance of the previous manager for the quarter ended 15 September; the state of the local and international economy in September 2009; a forecast for the QTC yield curve and the reasoning behind that forecast; desired positioning of the portfolio to take advantage of the forecast change to the yield curve; a list of proposed portfolio transactions; a forecast for the copper price and the Australian dollar and the reasoning behind that forecast; and a list of proposed hedge transactions, if any, and the reasoning behind them.
2. Portfolio and client cash flows that occur on 15 September 2009, including the underlying calculations. This should be included as an appendix to your Strategy Report.
3. Completed deal slips for 15 September transactions. These deal slips should be scanned and included as an appendix to your Strategy Report. You must comply with all normal game rules.
Your strategy report must be no more than ten A4 type-written pages, including any graphs, tables and calculations but excluding the appendices noted in (2) and (3) above. The report must be properly structured, with sections/headings where appropriate, and with at least 1.5 line spacing.
Attachment:- Assignment Files.rar