Capital Markets Case Report

Final Project Guidelines and Rubric

Overview

The Federal Reserve System sets policies that facilitate economic and financial activities with the intention of achieving maximum employment, stable prices, and moderate long-term interest rates. Companies must review and assess the impact of Fed policies to their long-term financial planning. Understanding and incorporating these policies into their financial strategic planning is necessary for a company to be successful.

In the final project for this course, you will select a Fortune 500 firm for which you will assume the role of chief financial officer (CFO). Given the scenario provided in the prompt below (detailing recent actions taken by the Federal Reserve), you must perform an investigation and analysis for the firm’s board of directors. Specifically, you will need to profile your organization, explain the role of the Federal Reserve to your audience, analyze the particular impacts of the recent Fed actions to capital markets, and put together appropriate recommendations to improve your firm’s financial position, as well as protect it from financial risk. The product of your inquiry and evaluation will be compiled into a capital markets case report.

The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure a quality final submission. These milestones will be submitted in Modules Two, Four, and Seven. The final project will be submitted in Module Nine.

In this assignment, you will demonstrate your mastery of the following course outcomes:

• Interpret macroeconomic events through the lens of firms’ strategic objectives to determine their likely impacts to capital marketconditions
• Utilize tools of risk management to accurately identify and effectively balance risk and return in corporate management and portfoliomanagement
• Evaluate the role of the Federal Reserve System in driving macroeconomic events that influence capitalmarkets
• Develop strategies for ethically improving the financial position of corporations based on sound assessments of capital marketopportunities

Prompt

In your capital markets case report, respond to the following scenario:

Imagine you are the chief financial officer (CFO) of the Fortune 500 company you chose in Module One (JPMorgan Chase & Co., AT&T, or Qualcomm). Given the positive macroeconomic trends, including improvements in labor market conditions, the Federal Reserve recently increased the federal funds rate. With the continued improvement in economic outlook, the Federal Reserve is poised to increase the federal funds rate again in the near future. The Fed believes that with the gradual increase in monetary policy, the economic activities and labor market will strengthen and inflation will remain consistent. As the CFO of your company, you must analyze and evaluate the likely impacts of the aforementioned Federal Reserve monetary policy actions to the wider economy (and specifically, to capital markets), as well as the resulting implications for your firm. Based on your assessment, you will put forth various

recommendations to the company’s board for improving their financial position while safeguarding against corporate risk.

Specifically, the following critical elements must be addressed:

1. Executive Summary: Summarize the key findings of your report using sufficient detail for your intendedaudience.
2. Organizational Profile: Describe the nature and structure of your organization. Specifically, identify the major strategic objectives of the organization. Be sure to clearly outline and carefully examine each, as you will need to refer back to these in your analysis of the scenario and in defending your financial recommendations.

III.    The Federal Reserve System

1. Illustrate the primary role and functions of the Federal Reserve System using specific examples. For example, what are its key macro-activities and their economicconsequences?
2. Explain the operational mechanics of the Federal Reserve System in terms of its structures and governance using specific details. In other words, how does the system work on a day-to-daybasis?
3. Illustrate the potential for the Federal Reserve’s monetary policies to impact capital markets using specific examples. For example, how can the Federal Reserve “make waves” in capital markets through their communications or lackthereof?

IV.    Analysis of the Scenario

1. Interpret the macroeconomic events described in the scenario to determine their likely impacts to capital market conditions. Cite specific evidence and principles discussed in the course that support yourclaims.
2. Draw connections between your analysis of the events and the more specific likely impacts to your own firm and their strategic objectives. Cite specific evidence and principles discussed in the course that support yourclaims.
3. Assess the potential for the macroeconomic events to pose financial risks to yourfirm.
   1. First accurately identify the risks. For example, how might your firm be negatively impacted by fluctuations in the money supply? Provide a specific example to illustrate each identifiedrisk.
   2. Then measure (i.e., quantify) the risks using appropriate financial tools. For example, consider calculating your firm’s debt-to-capital ratio, debt/equity ratio, interest coverage ratio and their degree of combinedleverage.

V.      Recommendations

1. Based on your analysis of the scenario, recommend specific risk management strategies for mitigating or otherwise addressing the identified risks. Defend your proposal using specific evidence and principles discussed in thecourse.

B.      Financial Strategies

1. Propose specific investment strategies that are informed by your analysis and that clearly support the organization’s strategic objectives. Defend each using evidence and principles discussed in thecourse.
2. Propose specific funding strategies that are informed by your analysis and that clearly support the organization’s strategic objectives. Defend each using evidence and principles discussed in thecourse.

• Finally, defend each of your proposals as being appropriately ethical. Discuss any potential legal or regulatory considerations and indicate how your strategies specifically acknowledgeeach.

Milestone One: The Federal Reserve System

Milestones

In Module Two, you will submit a draft of Section III of the final project (The Federal Reserve System). This milestone will be graded with the Milestone One Rubric.

Milestone Two: Organizational Profile

In Module Four, you will submit a draft of Section II of the final project (Organizational Profile). This milestone will be graded with the Milestone Two Rubric.

Milestone Three: Analysis of the Scenario

In Module Seven , you will submit a draft of Section IV of the final project (Analysis of the Scenario). This milestone will be graded with the Milestone Three Rubric.

Final Project Submission: Capital Markets Case Report

In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Rubric.

Deliverables

Final Project Rubric

Guidelines for Submission: Your capital markets case report should be 10 to 12 pages in length and should use 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.

Last Updated on February 11, 2019