Unit 3 Critical Assessment - Valuation of resources is a key

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Unit 3: Critical Assessment Forum

Within the graduate business curriculum, students are expected to research topics and provide linkages between the literature and your topic selection. Professional writing, tone, and grammar is expected and use of a minimum of two sources of literature published in the last 12 months (other than our text) is required in your initial critical assessment post.  Active participation in these forums facilitates learning and allows you to critically analyze a chosen topic and learn from your peers within the forum.

Directions 

Initial Critical Assessment

Valuation of resources is a key consideration for financial managers. Specifically, when making investment decisions, managers/investors must determine cost and benefits over periods of time to make appropriate decisions for limited resources.

Choose one of the following topics to present to your peers in a professional analysis using a minimum of 350 words.

  Topics (Choose one)

1. National governments issue debt securities known as sovereign bonds, which can be denominated in either local currency or global reserve currencies, like the U.S. dollar or euro. (source (Links to an external site.) ). For this discussion question, first define what these bonds are.  Why are these issued?  Then discuss the issues that can arise when investors invest in these types of bonds.  What are the advantages and disadvantages of these bonds

2. What are risks associated with investing in bonds as a long-term investment? Why would bonds/bond mutual fund be used within an investment portfolio and how might such an investment impact an investor?

3. Consider the European sovereign debt crisis.  In 2011, many countries in the European markets were suffering through a sovereign debt crisis which impacted multiple nations (Greece, Spain, Italy, Ireland, Portugal).  What were some of the causes and how did countries respond to this crisis?

4. Why do firms elect rules other than NPV (e.g. payback rule)? Would the NPV rule be more appropriate?  Why or why not?