8 04 finance assignment

Risk Return Ratio

The risk return ratio applies to any type of investment. Any time you invest money into something there is a risk, whether large or small, you might not get your money back. In turn, you expect a return, which compensates you for bearing this risk. In theory, the higher the risk, the more you should receive for holding the investment, and the lower the risk, the less you should receive.

Consider the following investment types, their level of risk, and their potential level of return. Review the videos from this lessonif you need to refresh your memory.

  1. Money market accounts
  2. Single stocks
  3. Bonds
  4. Mutual funds
  5. Fixed annuities
  6. Real estate

For this assignment:

  1. Put the investments in order by least risk to greatest risk. You can list by letter only (for example: a, b, c, d, e, f).
  2. On a second line, order the investments by least return to greatest return. Again, you can list by letter only.
  3. Review the sorted lists, and determine the one investment type you would select to start your investment portfolio. Provide a one-paragraph explanation of why you selected the investment along with your expected returns.

Rubric

Risk Return Ratio Rubric
Excellent Good Needs Improvement Poor
Content 35–40 points
The work contains allthe required elements:

  • ordered investments by risk
  • ordered investments by return
  • discusses selection of one investment to start a personal investment portfolio and includes rationale for the selection in one paragraph with a minimum of five sentences
29–34 points
The work contains mostof the required elements:

  • ordered investments by risk
  • ordered investments by return
  • discusses selection of one investment to start a personal investment portfolio and includes rationale for the selection in one paragraph with a minimum of five sentences
20–28 points
The work contains someof the required elements:

  • ordered investments by risk
  • ordered investments by return
  • discusses selection of one investment to start a personal investment portfolio and includes rationale for the selection in one paragraph with a minimum of five sentences
0–19 points
The work contains few of the required elements:

  • ordered investments by risk
  • ordered investments by return
  • discusses selection of one investment to start a personal investment portfolio and includes rationale for the selection in one paragraph with a minimum of five sentences
Quality 35–40 points
The ordered investment lists are completelyaccurate. Explanation of the investment type selected is completelydetailed, thoughtful, and includes appropriate rationale for selecting as first item in an investment portfolio.
29–34 points
The ordered investment lists are mostlyaccurate. Explanation of the investment type selected is mostlydetailed, thoughtful, and includes mostly appropriate rationale for selecting as first item in an investment portfolio.
20–28 points
The ordered investment lists are somewhataccurate. Explanation of the investment type selected is somewhatdetailed, thoughtful, and includes somewhat appropriate rationale for selecting as first item in an investment portfolio.
0–19 points
The ordered investment lists are inaccurate. Explanation of the investment type selected is inadequately detailed, lacks thoughtfulness, and includes inappropriate or little to no rationale for selecting as first item in an investment portfolio.
21st century presentation skills 17–20 points
The work is wellorganized, easy to read and comprehend. It has few spelling or grammar errors.
14–16 points
The work is mostlyorganized, easy to read and comprehend. It has few spelling or grammar errors.
10–13 points
The work is somewhatorganized with some difficulty to read and comprehend. It has somespelling or grammar errors.
0–9 points
The work lacksorganization, is difficult to read and comprehend. It has many spelling or grammar errors.

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