1. Oklahoma Instruments has a bond issue outstanding that pays $105 annually.

It has a face value of $1,000, and it will mature in eight years. Similar bonds are priced to yield 11%. What would you expect this bond to sell for?

2. Assume you have a client who owns the Oklahoma Instruments bond. You expect that the interest rates increase 1% over the coming year and you advise to sell the Oklahoma Instruments bond exactly one year from now. What will be the sale price and what is the return on the investment for the coming year?

ROI = (930.28-973.50)/973.50 = -4.44%

3. Find an article with an announcement of one of the companies in your portfolio and check how the stockprice reacted to that announcement. Make sure you explain what happened and you compare the change of the stockprice to the overall change in the market. For United Technologies (UTX) on October 16 th, they announced that in the 3 rd quarter, their net income rose 6% making their per share net income $1.33 as compared to $1.21 last quarter. This is good considering in the 3 rd quarter last year, their net income rose 7%. Given the tough economic times, it's good for the company to see that their growth is not stunted. The article credits UTC's diverse group of operations and small involvement in commercial finance for their continued growth. When this news came out, UTC's stock rose from 49.25 to 52.88, a 7.37% increase. At this time, the Dow Jones rose from 8577.91 to 8979.26, which is a 4.68% increase. As you can see, with this news, the stock rose more than the Dow did on that day, which to me shows that the announcement of the increase in net profit contributed to the additional increase of the stock.

4. Discuss where you believe we are on the General Business Cycle. You need to substantiate your analysis with data, i.e. employment data, interest rate data, consumer sentiment data, etc.

I believe at this time we are still in a downturn in terms of the business cycle. The reason for this is because first if we take a look at the GDP which was just released, the GDP decreased .3% this quarter. Last quarter the GDP increased by 2.8%, showing that we are now feeling the effects all over from the credit crisis. Once we start to see a slight increase in the GDP, that will be a sign that the country will start move upward again in the business cycle. Another indicator that we are in a downturn is that the unemployment rate has risen sharply in the past 9 months. At the beginning of the year the unemployment rate was at 4.9%, in September it's 6.1%. Which is a large increase in unemployment for one year. One other indicator which shows me that we are in an economic downturn is the Consumer Confidence Index, which is at an all-time low of 38.0, which is down sharply from 61.1, from just last month. The reason why I feel this is important to include is because the consumers are ultimately who determine how the markets go, and if the consumers aren't confident, they won't buy, which will just add to the downturn of the economy. Once the consumers get confident, they will buy more, which would lead to the GDP increasing, which is a sign that the economy is growing again, which will bring in more jobs thus lowering the unemployment rate. To conclude, I think a good indicator of the economy getting out of the downturn in the business cycle is consumer confidence, and once that doesn't happen, we will still be on a downturn, as shown by the statistics above.