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:
- Executive Summary: Summarize the key findings of your report using sufficient detail for your intended
- 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
- Illustrate the primary role and functions of the Federal Reserve System using specific examples. For example, what are its key macro-activities and their economic consequences?
- 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-day basis?
- 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 lack thereof?
IV. Analysis of the Scenario
- 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 your
- 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 your
- Assess the potential for the macroeconomic events to pose financial risks to your
- 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 identified
- 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 combined
- 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 the
B. Financial Strategies
- 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 the
- 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 the
- Finally, defend each of your proposals as being appropriately ethical. Discuss any potential legal or regulatory considerations and indicate how your strategies specifically acknowledge
Milestone One: The Federal Reserve System
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.