FIN 683 Ashford University Finance Investment Analysis Discussion
I’m stuck on a Finance question and need an explanation.
As the financial advisor at a money management firm, you have been asked to respond to a request from the client holding the bond portfolio listed below. The client has asked to include asset-backed securities in the portfolio. Select two asset-backed securities for consideration by the client and present them in your discussion post.
In your post, describe the following:
- Your proposed two chosen asset-backed securities for consideration. Include a chart like the one below, with the main characteristics of the two chosen securities.
- Your methodology for choosing the two securities.
- State the bond that you will remove from the client’s portfolio in exchange for the asset-backed security. Explain your reasons for choosing this bond to remove.
- Your expectations of how these asset-backed securities will perform in a rising interest rate environment and why.
- Specifically relate this to the maturity effect, coupon effect, and/or duration of the chosen security
|
Issuer |
Convertible or non-convertible |
Coupon |
Maturity |
Credit rating |
Last price – sale |
Last price – yield |
Callable? |
Puttable? |
|
Schwab Charles Corp |
Convertible |
3.25% |
10/01/24 |
A |
$110.36 |
-1.793% |
Yes |
No |
|
T-Mobile USA Inc – |
Non-convertible |
6.500% |
01/15/26 |
NR |
$103.18 |
5.074% |
Yes |
No |
|
Kraft Heinz Foods Co |
Non-convertible |
3.00% |
06/01/26 |
BB+ |
$106.52 |
1.543% |
Yes |
No |
|
Carnival Corp |
Non-convertible |
7.200% |
10/01/23 |
B- |
$107.53 |
3.658% |
No |
No |
|
Chobani LLC |
Non-convertible |
7.500% |
04/15/25 |
CCC |
$104.21 |
4.310% |
Yes |
No |
|
CVS Health Corp |
Non-convertible |
6.125% |
09/15/39 |
BBB |
$137.77 |
3.339% |
Yes |
No |
|
Nissan Motor Co., LTD |
Non-convertible |
3.043% |
09/15/23 |
BBB |
$104.38 |
1.027% |
Yes |
No |
|
SHERWIN-WILLIAMS CO |
Non-convertible |
5.500% |
10/15/27 |
BBB |
$100.03 |
5.497% |
No |
No |
