4-6 Question Investment Homework

Personal Financial Planning BUSI3013A:

Assignment #3. Investments: Due Monday Nov 2nd by Noon. – 4 QUESTIONS

Answering question #1 requires finding stock quotes. There are many financial websites that can be used. An example of one you can use is:

https://ca.finance.yahoo.com

In the search function of the website you will be asked for a stock “ticker symbol” and or security name. All of the following trade in $Canadian on the Toronto Stock Exchange.

#1. (3 MARKS) For the following 4 companies: LOBLAWS / TELUS / AIR CANADA / SHOPIFY

identify:

· The current price per share (use the price on the day you do the assignment).

· The highest price and lowest price over the past 52 weeks (This will be referred to as the 52 week high / low on financial websites).

· The current annual dividend per share.

· The dividend yield at the present time.

(ii) Which one of the above companies would be the best candidate for an investor focusing on generating income from dividends?

(iii) Which of the above companies would have generated the highest total return over the past 12 months?

#2. (3 MARKS) You are evaluating an investment for your Registered Retirement Savings Plan (RRSP). You are deciding between a mutual fund managed by company bank ABC and an exchange traded fund. Assume that before any fees both investments generate a gross return of 6% for the next 30 years. Fund ABC has a management expense ratio (MER) of 2% and the exchange traded fund has a management expense ratio of 0.10%

· What is the annual net return to you after fees for each investment?

· Using what you learned in assignment 2 about using the RRSP growth calculator how much money would you accumulate in the RRSP after 30 years if you invested $5,000 per year in each investment?

· How many dollars difference do the management fees make over the 30 years still assuming you deposit $5,000 per year.

FOR QUESTIONS 3 AND 4 BE AS DETAILED AS POSSIBLE WHILE STILL LIMITING ANSWER TO ½ PAGE FOR EACH QUESTION – BE CONCISE AND DON’T ASSUME THE READER HAS PRIOR KNOWLEDGE OF THE SUBJECT MATTER.

#3. (2 MARKS) Provide an example to explain the pros and cons between investing in a bond and investing in a stock.

#4. (2 MARKS) Provide an example to help explain the pros and cons between investing in a stock and an equity mutual fund.