Finance 1 Assignment 2

[golden]

How are you guys going?
I'm finding it a bit hard to find information!

[Gloamglozer]

Wait.  There's a subject called Finance 2?  You mean Finance 1, assignment 2?

[TrueTears]

what's this assignment about?

[golden]

Wait.  There's a subject called Finance 2?  You mean Finance 1, assignment 2?

LOL whoops! Yes you're right, i've changed it accordingly.

[Greatness]

what's this assignment about?

BHP issuing 2.5b worth of bonds in the US, and we have to write an essay about their reasoning for that - something along those lines.

I havent started yet, but yeah i think it may be a bit difficult to get started. Altho once you get some good info it shouldnt be too hard to bullshit some stuff to stretch it out lol

[TrueTears]

yeah I'm actually researching quite a bit on BHP atm (from doing the UBS banking challenge), but anyways here's a few points to think about:

1. there is a large growing demand in china for ores, and BHP is undergoing expansion in order to satisfy these high demands and they need funds to do this.

2. the main reason they're issuing a ton of bonds in america to borrow is because the AUD is currently quite strong relative to the US, and there's also speculation that it'll get even stronger, so this is actually making the cost of borrowing cheaper for BHP.

3. american investors on the other hand want to invest in aussie securities, this is because again the AUD is quite strong and it's a safe haven for US investors. Furthermore, as most american investor's atm are quite risk averse, there's a flight to quality to AUD denominated securities.

4. also if you examine BHP stock prices atm, it's continually increasing, suggesting again that it's quite a safe company to invest and hold funds in, whereas due to the economic unrest in America, investing in BHP is a much safer option than some of their local companies.

[jinny1]

Just out of interest, what is the word limit for this essay?

[Greatness]

Thanks for those TT We talked about a couple of those in lectures so theyre a good starting point.
1000 words i think.

[golden]

what's this assignment about?

BHP issuing 2.5b worth of bonds in the US, and we have to write an essay about their reasoning for that - something along those lines.

I havent started yet, but yeah i think it may be a bit difficult to get started. Altho once you get some good info it shouldnt be too hard to bullshit some stuff to stretch it out lol

Wasn't it 5.25b lol?

[Greatness]

Haha yeah it was, my bad I'll try starting this assignment this weekend....

[golden]

If BHP would have done it because of more 'easier' regulation or processing etc. please PM me! We can discuss any other factors as well (we will not break any rules in our discussions though).

On the assignment it says 2-3 pages for the body. If anyone writes 3 pages only for the body and keeps within the word limit then maybe you've put into too many diagrams or are using too large of a font/no ruler modifications on Word (or other programs).

[emb_23]

I am finding it really hard to find resources on this! And my tutor is about as helpful as an air conditioner in the north pole

[TrueTears]

Have a play around with yahoo finance, http://au.finance.yahoo.com/echarts?s=BHP.AX#symbol=bhp.ax;range=1m;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

now change the options under "technical indicators" and you can discuss quite alot from just this (esp from a mathematical point of view)

you can talk about how the SMA is derived for BHP and what it represents mathematically, also you can discuss BHP's RSI relative to the AO index before and after this bond issue and maybe you can even formally derive the changes in the RSI.

furthermore, try select a portion of BHP's stock price, say from Jan to May, then do some technical analysis yourself during this period, there is plenty to talk about, ask yourself: is there any support or resistance (http://en.wikipedia.org/wiki/Resistance_%28technical_analysis%29)? are there any breakouts? (http://en.wikipedia.org/wiki/Breakout_%28technical_analysis%29) does the trendline suggest a bullish or bearish reaction to BHP's new bond offers? (http://en.wikipedia.org/wiki/Market_trend) Talk about BHP's momentum before and after it's new issues (http://en.wikipedia.org/wiki/Momentum_%28technical_analysis%29)

[Greatness]

Wow i have no idea what most of that means hahah i think i'll just dig deeper into some of the points i have atm lol

also wtf with this essay structure:
abstract: one paragraph to establish the topic, intro: 2 paras establish the problem the essay is going to address, main body: 2-3 pages of discussion and conlusion: summarise

I dont get why you need 2 paragraphs for an introduction, shouldnt it just address the points in your argument? Or do we write essays differently in uni?

[golden]

Wow i have no idea what most of that means hahah i think i'll just dig deeper into some of the points i have atm lol

also wtf with this essay structure:
abstract: one paragraph to establish the topic, intro: 2 paras establish the problem the essay is going to address, main body: 2-3 pages of discussion and conlusion: summarise

I dont get why you need 2 paragraphs for an introduction, shouldnt it just address the points in your argument? Or do we write essays differently in uni?

Lol! What I did was for the abstract just say what BHP is doing, it should be brief.
In the introduction I put my main points in a few sentences along with things like why it is important. But I never mentioned about importance much in the body lol. I don't think you have to.