6-1 Journal: Price Impact Of News Please see attachment FIN 340 Module Six Journal Guidelines and Rubric Overview: This journal activity is private betwe

Please see attachment

FIN 340 Module Six Journal Guidelines and Rubric

Overview: This journal activity is private between you and the instructor. This assignment will allow you to assess the impact of news on stocks and bonds. News
can affect stock and bond prices in significant ways. This is because news disseminates into the market at different speeds and with different levels of
importance. As investors, you need to think about how information flows through market participants and into securities. Surprise news can jolt the market up
or down, whereas gradual dissemination can result in a slow buildup or deterioration in prices/yields. Additionally, market participants sometimes build
expectations beforehand, and prices react differently than people expected because the news did not meet or exceed expectations. All of these dynamics can
supply important information to apply to an investor’s portfolio decisions.

Prompt: Complete both of the following scenarios:

1) Choose a stock from list below:

· International Business Machines Corporation (IBM)
· The Coca-Cola Company (KO)
· Bristol-Myers Squibb Company (BMY)
· Oracle Corporation (ORCL)
· 3M Company (MMM)
· Baxter International, Inc. (BAX)
· Big Lots, Inc. (BIG)
· Netflix, Inc. (NFLX)
· Akamai Technologies, Inc. (AKAM)
· General Electric Company (GE)

Then, go to Yahoo! Finance or another website and find a news article that you believe would impact the company’s stock price.

Calculate the return of the chosen stock for:

· The two weeks prior to the news
· The day of the news
· The two weeks after the news

Explain how the actual impact of the news on the stock price aligned with your initial expectation after reading the news article.

2) Choose a significant economic report (unemployment, GDP, etc.) or Federal Reserve Open Market Committee announcement.

Then, use Yahoo! Finance to research the historical pricing of the CBOE 10 year treasury yield (symbol: ^TNX). Calculate the percentage change for:

· The 2 weeks prior to the news
· The day of the news
· The 2 weeks after the news

Explain how the actual impact of the news on the bond yield aligned with your initial expectation after reading the news article. Be sure to show your work to
get full credit for these calculations.

Specifically the following critical elements must be addressed:

I. Calculate the return of the chosen stock for the two weeks prior to the news, the day of the news, and the two weeks after the news. Show your work to
support your response.

II. Explain whether the news article had the impact on the stock price that you expected.
III. Calculate the percentage change of the CBOE 10 year treasury yield for the two weeks prior to the news, the day of the news, and the two weeks after

the news. Show your work to support your response.
IV. Explain how the actual impact of the news on the bond yield aligned with your initial expectation after reading the news article.

Rubric
Guidelines for Submission: Your journal assignment should be two to three paragraphs in length and address all of the critical elements. It should also cite at
least two sources using APA format. Consider utilizing the required readings, as well as recent news articles. Submit journal assignment as a Word document.

Critical Elements Exemplary Proficient Needs Improvement Not Evident Value

Return Calculates the return of the chosen
stock prior to the news, the day of
the news, and after the news,
supporting each calculation by
showing the work involved with no
errors (100%)

Calculates the return of the
chosen stock prior to the news,
the day of the news, and after the
news, but calculations contain
errors, or work to support
calculations is not shown (75%)

Does not calculate the return
of the chosen stock prior to the
news, the day of the news, and
after the news (0%)

20

Impact Meets “Proficient” criteria and
demonstrates a deep
understanding of the topic
(100%)

Explains whether the news article
had the impact on the stock price
that was expected (85%)

Explains whether the news article
had the impact on the stock price
that was expected, but
explanation is inaccurate and/or
incomplete (55%)

Does not explain whether the
news article had the impact on
the stock price that was
expected (0%)

25

Treasury Yield Calculates the percentage change of
the CBOE 10 year treasury yield for
the two weeks prior to the news, the
day of the news, and the two weeks
after the news, supporting each
calculation by showing the work
involved with no errors (100%)

Calculates the percentage change
of the CBOE 10 year treasury
yield for the two weeks prior to
the news, the day of the news,
and the two weeks after the
news, but calculations contain
errors, or work to support
calculations is not shown (75%)

Does not calculate the
percentage change of the CBOE
10 year treasury yield for the
two weeks prior to the news,
the day of the news, and the
two weeks after the news (0%)

20

Bond Yield Meets “Proficient” criteria and
demonstrates a deep
understanding of the topic
(100%)

Explains how the actual impact of
the news on the bond yield aligned
with the initial expectation after
reading the news article (85%)

Explains how the actual impact of
the news on the bond yield
aligned with the initial
expectation after reading the
news article, but explanation is
inaccurate and/or incomplete
(55%)

Does not explain how the
actual impact of the news on
the bond yield aligned with the
initial expectation after reading
the news article (0%)

25

Articulation of
Response

Meets “Proficient” criteria and
is presented in a professional
and easy-to-read format
(100%)

Journal assignment is well-organized,
clear, concise, convincing, and free
of errors in spelling, syntax, or
grammar, with relevant sources that
are authoritative and properly cited
(85%)

Journal assignment has major
errors related to citations,
grammar, spelling, syntax, or
organization that negatively
impact readability and
articulation of main ideas (55%)

Journal assignment has critical
errors related to citations,
grammar, spelling, syntax, or
organization that prevent
understanding of ideas (0%)

10

Total 100%

  • FIN 340 Module Six Journal Guidelines and Rubric
    • Rubric

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