Opol Community College

Poblacion, Opol Misamis Oriental

Compilation of all
Activities

Submitted by: Jinky C. Naduma

Section: BSBA - 3C

Submitted to: Mr. Roy Arellano

week 1: Activity(own words)sept 28, 2020
1. What is your personal understanding when we talk about Investment?

 My personal understanding about investment it is about something that we invest

in nature of business.
2. What are the types of investments that you personally know of?

 The types of investment mostly I know id the; stocks, bonds, and insurance
funds.
3. If you are given the chance to invest in a business, what kind of business this will be?

 If given a chance I would invest a fast food business because this is the higher
demand in the economy and it grows faster.

Week 2: RESEARCH on FREE Facebook Data(Oct. 5, 2020)

what is the difference between Investment and Financing?

 The difference between investment and finance is that the investment focuses on
the allocation of money where your money goes and what should be the benefits
would you receive in the future. While financing is more on managing your
finances. It simplify about the circulation of money in every institution , it's about
raising your capital to provide adequate sources of funds.

 In my own understanding the difference between investing and financing is that

investing will focus on how will you earn or gain from what you have invested it
will differ from what kind of investment you are up to. And expecting for a return
called dividends or interest. The main purpose of investing is to increase your
funds from its actual amount that is why we invest to make our money grow in
the future. While financing it is a financial market which provide or raises a capital
for a company or an institution for them to continue their operations. It will give a
opportunities for those who are lack of capital to sustain the needs of their
operation this market will provide an adequate support to those companies and
individuals that needs a capital.
Week 3: INVESTMENT ENVIRONMENT (10/12/20)
1. What is an unregulated private investment?
 hedge Funds
2. What is the name for ‘short-term unsecured promissory note’?
 Commercial Paper
3. What company is in the business of assuming the risks of adverse events?
 Banker's Acceptance
4. What agreement is for a loan of funds for one day called?
 Repurchase Agreement
 5. What are the two difference groups of securities?
 Long-Term debt securities and Preferred stocks

6. What is the main difference between preferred stocks and bonds?

 Preferred stocks are equity security, which has infinitive life and pay
dividends. But preferred stock is attributed to the type of fixed-income
securities, because the dividend for preferred stock is fixed in amount and
known in advance.
 A bond is referred to as a fixed income instrument since bonds
traditionally paid a fixed interest rate (coupon) to debtholders. Variable or
floating interest rates are also now quite common.

7. What is T-Bill?
 Treasury bills (also called T-bills) are securities representing financial
obligations of the government. Treasury bills have maturities of less than
one year.
8. What investment vehicle is considered investments with a high risk and high
investment return?
 Speculative investment vehicles
9. What are the two types on investment funds?
 Open-end funds and Closed-end funds
10. What is the name for ‘short-term fixed income securities?
 Short - term investment vehicles

As Chapter1 ender requirement, using FREE Research on Facebook, please

define all the key terms below. (10/19/20)
 Alternative Trading System (ATS) - Alternative trading system is a US and
Canadian regulatory term for a non-exchange trading venue that matches buyers
and sellers to find counterparties for transactions. Alternative trading systems are
typically regulated as broker-dealers rather than as exchanges. In general, for
regulatory purposes an alternative trading system is an organization or system
that provides or maintains a market place or facilities for bringing together
purchasers and sellers of securities, but does not set rules for subscribers. An
ATS must be approved by the United States Securities and Exchange
Commission and is an alternative to a traditional...
 Broker - A broker is a person or firm who arranges transactions between a buyer
and a seller for a commission when the deal is executed. A broker who also acts
as a seller or as a buyer becomes a principal party to the deal. Neither role
should be confused with that of an agent—one who acts on behalf of a principal
party in a deal.
 Capital market - A capital market is a financial market in which long-term debt or
equity-backed securities are bought and sold. Capital markets channel the wealth
of savers to those who can put it to long-term productive use, such as companies
 or governments making long-term investments. Financial regulators like
Securities and Exchange Board of India, Bank of England and the U.S. Securities
and Exchange Commission oversee capital markets to protect investors against
fraud, among other duties.
 Closed-end funds - A closed-end fund or closed-ended fund is a collective
investment model based on issuing a fixed number of shares which are not
redeemable from the fund. Unlike open-end funds, new shares in a closed-end
fund are not created by managers to meet demand from investors. Instead, the
shares can be purchased and sold only in the market, which is the original design
of the mutual fund, which predates open-end mutual funds but offers the same
actively-managed pooled investments.
 Common stock - Common stock is a form of corporate equity ownership, a type
of security. The terms voting share and ordinary share are also used frequently in
other parts of the world; "common stock" being primarily used in the United
States. They are known as equity shares or ordinary shares in the UK and other
Commonwealth realms. This type of share gives the stockholder the right to
share in the profits of the company, and to vote on matters of corporate policy
and the composition of the members of the board of directors.
 Debt securities - Debt securities are a type of financial platform in which an
issuer, also known as a creditor, provides assets to a borrower with the intention
of receiving a repayment of the funds. Basically, it is some form of contract that
represents money owed to another party. Examples of this include different types
of bonds, documents such as debentures, or even paper money issued by a
bank or government. These securities are usually backed by some sort of legal
standing; however, some countries do not regulate the practice and allow
creditors to issue statements privately.
 Derivatives - A derivative is a financial security with a value that is reliant upon
or derived from, an underlying asset or group of assets—a benchmark. The
derivative itself is a contract between two or more parties, and the derivative
derives its price from fluctuations in the underlying asset. The most common
underlying assets for derivatives are stocks, bonds, commodities, currencies,
interest rates, and market indexes.
 Direct investing - A foreign direct investment is an investment in the form of a
controlling ownership in a business in one country by an entity based in another
country. It is thus distinguished from a foreign portfolio investment by a notion of
direct control. The origin of the investment does not impact the definition, as an
FDI: the investment may be made either "inorganically" by buying a company in
the target country or "organically" by expanding the operations of an existing
business in that country.
 Diversification - Diversification is a risk management strategy that mixes a wide
variety of investments within a portfolio. A diversified portfolio contains a mix of
distinct asset types and investment vehicles in an attempt at limiting exposure to
any single asset or risk. The rationale behind this technique is that a portfolio
constructed of different kinds of assets will, on average, yield higher long-term
returns and lower the risk of any individual holding or security.
 Financial institutions - Financial institutions, otherwise known as banking
institutions, are corporations that provide services as intermediaries of financial
markets. Broadly speaking, there are three major types of financial institutions:
1. Depository institutions – deposit-taking institutions that accept and manage
deposits and make loans, including banks, building societies, credit unions, trust
companies, and mortgage loan companies;
2. Contractual institutions – insurance companies and pension funds
3. Investment institutions – investment banks, underwriters, brokerage firms.
Financial institutions can be distinguished broadly into two categories...
 Financial intermediaries- A financial intermediary is an institution or individual
that serves as a middleman among diverse parties in order to facilitate financial
transactions. Common types include commercial banks, investment banks,
stockbrokers, pooled investment funds, and stock exchanges. Financial
intermediaries reallocate otherwise uninvested capital to productive enterprises
through a variety of debt, equity, or hybrid stakeholding structures.
 Financial investments - Financial investment refers to putting aside a fixed
amount of money and expecting some kind of gain out of it within a stipulated
time frame.
 Indirect investing - Financial investment refers to putting aside a fixed amount
of money and expecting some kind of gain out of it within a stipulated time frame.
 Institutional investors - An institutional investor is an entity which pools money
to purchase securities, real property, and other investment assets or originate
loans. Institutional investors include banks, credit unions, insurance companies,
pensions, hedge funds, REITs, investment advisors, endowments, and mutual
funds. Operating companies which invest excess capital in these types of assets
may also be included in the term.
 Investment - To invest is to allocate money in the expectation of some benefit in
the future. In finance, the benefit from an investment is called a return. The return
may consist of a gain realized from the sale of a property or an investment,
unrealized capital appreciation, or investment income such as dividends, interest,
rental income etc., or a combination of capital gain and income. The return may
also include currency gains or losses due to changes in the foreign currency
exchange rates.
 Investment Environment - The investment environment is the international
economy and the domestic economy, developments in which have an effect on
the values (prices) of the assets...
 Investment Vehicles - An investment fund is a way of investing money
alongside other investors in order to benefit from the inherent advantages of
working as part of a group.
 Investment Management Process - Investment management refers to the
handling of financial assets and other investments—not only buying and selling
them. Management includes devising a short- or long-term strategy for acquiring
and disposing of portfolio holdings.
 Investment Policy - An investment policy is any government regulation or law
that encourages or discourages foreign investment in the local economy, e.g.
currency exchange limits.
 Investment Horizon - Investment horizon is a term used to identify the length of
time an investor is aiming to maintain their portfolio before selling their securities
Marketable securities are unrestricted short-term financial instruments that are
issued either for equity securities or for debt securities of a publicly listed
company. The issuing company creates these instruments for the express
purpose of raising funds to further finance business activities and expansion. for
a profit.
 Investment Management - Investment management is the professional asset
management of various securities and other assets in order to meet specified
investment goals for the benefit of the investors. Investors may be institutions or
private investors. The term 'asset management' is often used to refer to the
investment management of investment funds, while the more generic term 'fund
management' may refer to all forms of institutional investment as well as
investment management for private investors.
 Investment Funds - An investment fund is a way of investing money alongside
other investors in order to benefit from the inherent advantages of working as
part of a group.
 Investment Portfolio - In finance, a portfolio is a collection of investments.The
term “portfolio” refers to any combination of financial assets such as stocks,
bonds and cash. Portfolios may be held by individual investors or managed by
financial professionals, hedge funds, banks and other financial institutions. It is a
generally accepted principle that a portfolio is designed according to the
investor's risk tolerance, time frame and investment objectives. The monetary
value of each asset may influence the risk/reward ratio of the portfolio.
 Investment Life Insurance - Life insurance as an investment in estate planning.
To be clear, the vast majority of life insurance is purchased for risk management.
The death benefit is a hedge that provides cash in the event of an...
 Hedge Funds - A hedge fund is an investment fund that trades in relatively liquid
assets and is able to make extensive use of more complex trading, portfolio-
construction and risk management techniques to improve performance, such as
short selling, leverage, and derivatives.
 Long-term Investments - A long-term investment is an account on the asset
side of a company's balance sheet that represents the company's investments,
including stocks, bonds, real estate, and cash. Long-term investments are assets
that a company intends to hold for more than a year.
 Money Market - The money market is a component of the economy which
provides short-term funds. The money market deals in short-term loans,
generally for a period of less than or equal to 365 days. As money became a
commodity, the money market became a component of the financial market for
assets involved in short-term borrowing, lending, buying and selling with original
maturities of one year or less.
 Open-end Funds - Open-end fund (or open-ended fund) is a collective
investment scheme that can issue and redeem shares at any time. An investor
will generally purchase shares in the fund directly from the fund itself, rather than
from the existing shareholders.
 Organized Security Exchange - Organized securities exchanges are tangible
organizations that act as secondary markets in which outstanding securities are
resold. Organized exchanges account for about 59 percent of the total dollar
volume of domestic shares traded.
 Over-the-counter Market - Over-the-counter or off-exchange trading is done
directly between two parties, without the supervision of an exchange. It is
contrasted with exchange trading, which occurs via exchanges. A stock
exchange has the benefit of facilitating liquidity, providing transparency, and
maintaining the current market price.
 Pension Funds - A pension fund, also known as a superannuation fund in some
countries, is any plan, fund, or scheme which provides retirement income.
Pension funds typically have large amounts of money to invest and are the major
investors in listed and private companies.
 Primary Market - The primary market is the part of the capital market that deals
with the issuance and sale of equity-backed securities to investors directly by the
issuer. Investors buy securities that were never traded before. Primary markets
create long term instruments through which corporate entities raise funds from
the capital market. It is also known as the New Issue Market.
 Preferred Stock - Preferred stock is a form of stock which may have any
combination of features not possessed by common stock including properties of
both an equity and a debt instrument, and is generally considered a hybrid
instrument. Preferred stocks are senior to common stock, but subordinate to
bonds in terms of claim and may have priority over common stock in the payment
of dividends and upon liquidation.
 Real Investments - Real investment is money that is invested in tangible and
productive assets such as machinery and plant, as opposed to investment in
securities or other financial instruments.
 Secondary Market - The secondary market, also called the aftermarket and
follow on public offering, is the financial market in which previously issued
financial instruments such as stock, bonds, options, and futures are bought and
sold. Another frequent usage of "secondary market" is to refer to loans which are
sold by a mortgage bank to investors such as Fannie Mae and Freddie Mac.
 Short-term Investments- Short-term investments, also known as marketable
securities or temporary investments, are those which can easily be converted to
cash, typically within 5 years. ... Some common examples of short term
investments include CDs, money market accounts, high-yield savings accounts,
government bonds and Treasury bills.
 Speculation - Speculation is the purchase of an asset with the hope that it will
become more valuable in the near future. In finance, speculation is also the
practice of engaging in risky financial transactions in an attempt to profit from
short term fluctuations in the market value of a tradable financial instrument—
 rather than attempting to profit from the underlying financial attributes embodied
in the instrument such as value addition, return on investment, or dividends.
 Speculative Investment - A speculative investment is one with a high degree of
risk where the focus of the purchaser is on price fluctuations. The investor buys
the tradable good (financial instrument) in an attempt to profit from market value
changes. We call somebody who makes a speculative investment a speculator.

Chapter 2: QUANTITATIVE Analysis(10/26/2020)

1. What are the three main features of Qualitative Analysis?
 Human Capital
 Subjective Judgement
 Gut Reaction
2. What is the main problem of Qualitative Analysis?
 Cognitive and behavioral errors
3. Where do Quantitative Analysis usually rely on?
 Technology, Mathematics, and Statistics
4. Why Quantitative Analysis is becoming widespread?
 It is because of the information that is rapidly spread through the use of
technology.
5. Why we need Quantitative Analysis?
 To make an information that can help you to analyze what part of
investment would you take it. It's about how to disseminate information to
identify which is more accurate or not.
6. What are the two pillars of Quantitative Analysis?
 Looking for correlation
 Statistical significance
7. When can you say that variables are negatively correlated?
 When the other variable goes up and it is negatively correlated
8. When can you say that variables are positively correlated?
 When the variable tends to go up and other variable goes up it is positively
correlated
9. What does causation mean?
 Not only 2 variables tend to move together and one of them is actually
causing movement to the other
10. What does Eurodollar term refers to?
 Refers to US DOLLAR denominated deposits at EUROPEAN Banks

Chapter 2 Activity: Through gmail (10/26/2020)

o Beta factor - Beta is a measure of a stock's volatility in relation to the overall

market. ... If a stock moves less than the market, the stock's beta is less than 1.0.
High-beta stocks are supposed to be riskier but provide higher return potential;
low-beta stocks pose less risk but also lower returns.
o Characteristic line - A characteristic line is a straight line formed using
regression analysis that summarizes a particular security's systematic risk and
rate of return. The characteristic line is also known as the security characteristic
line (SCL).
o Coefficient of correlation - A correlation coefficient is a numerical measure of
some type of correlation, meaning a statistical relationship between two
variables. The variables may be two columns of a given data set of observations,
often called a sample, or two components of a multivariate random variable with
a known distribution.
o Coefficient of determination - In statistics, the coefficient of determination,
denoted R² or r² and pronounced "R squared", is the proportion of the variance in
the dependent variable that is predictable from the independent variable.
o Correlation - Correlation, in the finance and investment industries, is a statistic
that measures the degree to which two securities move in relation to each other.
Correlations are used in advanced portfolio management, computed as the
correlation coefficient, which has a value that must fall between -1.0 and +1.0.
o Covariance - In probability theory and statistics, covariance is a measure of the
joint variability of two random variables. If the greater values of one variable
mainly correspond with the greater values of the other variable, and the same
holds for the lesser values, the covariance is positive.
o Expected rate of return - The expected return on a financial investment is the
expected value of its return. It is a measure of the center of the distribution of the
random variable that is the return.
o Holding period return - holding period return is the return on an asset or
portfolio over the whole period during which it was held. It is one of the simplest
and most important measures of investment performance. HPR is the change in
value of an investment, asset or portfolio over a particular period.
o Intercept - In a Cartesian coordinate system, the coordinate of a point at which a
line, curve, or surface intersects a coordinate axis. If a curve intersects the x-axis
at (4,0), then 4 is the curve's x-intercept; if the curve intersects the y-axis at (0,2),
then 2 is its y-intercept.
o Investment risk - Investment risk can be defined as the probability or likelihood
of occurrence of losses relative to the expected return on any particular
investment. Description: Stating simply, it is a measure of the level of uncertainty
of achieving the returns as per the expectations of the investor.
o Market portfolio - A market portfolio is a theoretical bundle of investments that
includes every type of asset available in the investment universe, with each asset
weighted in proportion to its total presence in the market. The expected return of
a market portfolio is identical to the expected return of the market as a whole.
o Population covariance - The population covariance between and is obtained by
summing over all pairs of variables. We then multiply respective coefficients from
the two linear combinations as times the covariance’s between j and k. We can
then estimate the population covariance by using the sample covariance.
o Probability - Probability is the branch of mathematics concerning numerical
descriptions of how likely an event is to occur, or how likely it is that a proposition
is true. The probability of an event is a number between 0 and 1, where, roughly
speaking, 0 indicates impossibility of the event and 1 indicates certainty.
o Residual - A residual is a measure of how well a line fits an individual data point.
Consider this simple data set with a line of fit drawn through it.
o Residual variance - Residual Variance (also called unexplained variance or
error variance) is the variance of any error (residual). The exact definition
depends on what type of analysis you're performing. For example, in regression
analysis, random fluctuations cause variation around the “true” regression line.
o Return on investment - Return on Investment (ROI) is a performance measure
used to evaluate the efficiency of an investment or compare the efficiency of a
number of different investments. ... To calculate ROI, the benefit (or return) of an
investment is divided by the cost of the investment. The result is expressed as a
percentage or a ratio.
o Sample mean of return - Mean return, in securities analysis, is the expected
value, or mean, of all the likely returns of investments comprising a portfolio. ... In
capital budgeting, a mean return is the mean value of the probability distribution
of possible returns.
o Sample standard deviation - Here's how to calculate sample standard
deviation: Step 1: Calculate the mean of the data—this is xˉx, with, \bar, on top in
the formula. Step 2: Subtract the mean from each data point. ... Step 5: Divide
the sum by one less than the number of data points in the sample.
o Sample covariance - The sample covariance matrix is a square matrix whose i, j
element is the sample covariance (an estimate of the population covariance)
between the sets of observed values of two of the variables and whose I,
element is the sample variance of the observed values of one of the variables.
 o Sample variance - The sample variance, s2, is used to calculate how varied a
sample is. A sample is a select number of items taken from a population. ... The
solution is to take a sample of the population, say 1000 people, and use that
sample size to estimate the actual weights of the whole population.
o Simple probability distribution - The simplest probability distribution occurs
when all of the values of a random variable occur with equal probability. This
probability distribution is called the uniform distribution. Suppose a die is
tossed. ... Each possible outcome is a random variable (X), and each outcome is
equally likely to occur.
o Standard deviation - The Standard Deviation is a measure of how spread out
numbers are.
o Variance - The average of the squared differences from the Mean.

Preliminary Activity: Investment in Stocks. (11/16/2020)

1. What are the best investment option?

✔Direct equity
✔Equity mutual funds
✔Debt mutual funds
✔Bank fixed deposit (FD)
✔ Real Estate
✔Gold
2. Why stock is one of the best option to invest for beginners?
✔stocks will be better for a beginner investors. This is because they are easier to
learn, are less susceptible to large trading swings or volatility, and are typically
easier for a beginner to access, such as through a retail broker or an online
trading account.

Chapter 4 Part 1 Activity:

Asset – utilization ratios–which measure the ability of the firm to use its assets
efficiently.
Blue chip stocks - Blue-chip stocks are huge companies with excellent reputations,
often including some of the biggest household names.
“Bottom-up” forecasting approach – the investors are first involved in making the
analysis and forecast of the economy, then for industries, and finally for companies. The
industry forecasts are based on the forecasts for the economy and a company’s
forecasts are based on the forecasts for both its industry and the economy.
Capital goods - A capital good is a durable good that is used in the production of goods
or services. Capital goods are one of the three types of producer goods, the other two
being land and labor. The three are also known collectively as "primary factors of
production" This classification originated during the classical economics period and has
remained the dominant method for classification.
Cyclical stocks - A cyclical stock is a stock that's price is affected by macroeconomic
or systematic changes in the overall economy.
Company analysis -Company analysis is a written document that consists of the
overall evaluation and assessment of an organization's performance in terms of
finances, feasibility, and productivity.
Constant growth DDM - is the constant growth rate in perpetuity expected for the
dividends. The DDM equation can also be understood to state simply that a stock's total
return equals the sum of its income and capital gains.
Consumer durables - In economics, a durable good or a hard good or consumer
durable is a good that does not quickly wear out, or more specifically, one that yields
utility over time rather than being completely consumed in one use.
Debt ratios - which measure the firm’s ability to pay the debt obligations over the time.
Defensive stocks - Defensive stocks as a group have a higher Sharpe ratio than the
stock market as a whole. That is a strong argument that defensive stocks are objectively
better investments than other stocks.
Discounted dividend models(DDM) - The dividend discount model (DDM) is a method
of valuing a company's stock price based on the theory that its stock is worth the sum of
all of its future dividend payments, discounted back to their present value.
Economic analysis - describes the macroeconomic situation in the particular country
and its potential influence on the profitability of stocks.
E-I-C analysis - EIC Analysis Some companies are regulated by the government for
political and social reasons. Identify government regulations that affect the industry.
- Important terms you should know before investing in Stock market.
Fundamental analysis - Fundamental analysis, in accounting and finance, is the
analysis of a business's financial statements; health; and competitors and markets. It
also considers the overall state of the economy and factors including interest rates,
production, earnings, employment, GDP, housing, manufacturing and management.
There are two basic approaches that can be used: bottom up analysis and top down
analysis.
Growth stocks - a growth stock is a stock of a company that generates substantial and
sustainable positive cash flow and whose revenues and earnings are expected to
increase at a faster rate than the average company within the same industry.
Income stocks - An income stock is an equity security that pays regular, often steadily
increasing dividends. Income stocks usually offer a high yield that may generate the
majority of the security's overall returns.
Income capitalization - Income capitalization is a valuation method that appraisers and
real estate investors use to estimate the value of income-producing real estate. It is
based on the expectation of future benefits.
Video Activity: Regarding Stocks (10/23/20)
1. What are the main points to remember for Investing Stocks as beginner?
Answer: the main points to remember about stocks is to assume that there is a return
that you received on what you have invest.
2. What are the main steps in investing stocks in the Philippine Stock Exchange?
Answer: investing earmarks money for the future, hoping that it will grow over time.
3. Do you think investing in Stocks is an opportunity for everyone?
Answer: yes, it is an opportunity to everyone where all are have the opportunity to
invest.
4. Do you consider investing in Stocks if given the chance? Why and why not?
Answer: yes, I consider it as a chance for all the people have the chance to invest.
5. Research on what are the things you should do to not lose your hard earned money
in investments?
Answer: Stock investment is not an easy job. As an investor you might be thinking of a
million ways to grow your money, but for this the most important thing is not to lose your
hard-earned money.

Chapter 4 Requirement: (11/30/20)

 List down 10 Philippine Stocks that are good for long-term investment.
1. Ayala Corp. (AC)
2. Ayala Land, Inc. (ALI)
3. Aboitiz Power Corp. (AP)
4. Banco De Oro (BDO)
5. Bank of Philippine Islands (BPI)
6. DMCI Holdings, Inc. (DMC)
7. First Metro Phil. Equity ETF (FMETF)
8. GT Capital Holdings (GTCAP)
9. Int’l Container Terminal Services (ICT)
10. Jollibee Foods Corp. (JFC)
 List down 10 best Blue Chip stocks in the Philippines.
1. Ayala Corp. (Conglomerates)
 2. Ayala Land, Inc. (Property)
3. Aboitiz Power Corp. (Power)
4. Banco De Oro (Bank)
5. Bank of the Philippine Islands (Bank)
6. Int’l Container Terminal Services (Port Operations)
7. Jollibee Foods Corp. (Consumer)
8. Metropolitan Bank & Trust Company / Metrobank (Bank)
9. Metro Pacific Investments (Infrastructure)
10. SM Investments Corp. (Conglomerates)
 Choose one Company you listed in item no. 1 as good for long tern investment
and research/provide Company.
Answer: Jollibee Food Corp.(Consumer)

 Profile/Background including name of owner and any photo of the company.

Answer: Jollibee Foods Corp. is engaged in developing, operating, and
franchising fast food stores under the trade name Jollibee. The company
operates through the following segments: Food Service, Franchising, and
Leasing. The Food Service segment operates quick service restaurants and the
manufacture of food products to be sold to Jollibee Group-owned and franchised
QSR outlets. The Franchising segment franchises the Jollibee Group's QSR
store concepts. The Leasing segment leases store sites mainly to the Jollibee
Group's independent franchisees. Jollibee Foods was founded by Tony Tan
Caktiong in 1975 and is headquartered in Pasig City, Philippines.
 Ernesto Tanmantiong is the President and Chief Executive Officer of Jollibee
Foods Corporation (JFC), one of the world's largest and fastest growing Asian
food service companies with over 4,500 stores in 21 countries.
 Choose one Company you listed in item no. 2 as best Blue Chip stock and
research/provide Company Profile/Background including name of owner and any
photo of the company.
Answer: Ayala Corporation is the publicly listed holding company for the
diversified interests of the Ayala Group. Founded in the Philippines by
Domingo Róxas and Antonio de Ayala during the Spanish colonial rule, it is
the country's oldest and largest conglomerate.
o CEO: Jaime Augusto Zobel de Ayala (Apr 2006)
o Founders: Antonio de Ayala, Domingo Róxas
o Stock price: AYALY (OTCMKTS) US$15.95 +0.70 (+4.59%)
o Headquarters: Makati
o Net income: 42 billion PHP (2020)
o Subsidiaries: Manila Water, Ayala Land, Bank of the Philippine
Islands, AC Energy, more.
Chapter 4: INVESTMENT IN STOCKS (Part 2)
list of at least three investment strategies
1. Value Investing - Value investors are bargain shoppers. They seek stocks they
believe are undervalued. They look for stocks with prices they believe don’t fully
reflect the intrinsic value of the security. 
2. Growth investing -  Rather than look for low-cost deals, growth investors want
investments that offer strong upside potential when it comes to the future
earnings of stocks..
3. Momentum investing - Momentum investors ride the wave. They believe
winners keep winning and losers keep losing. They look to buy stocks
experiencing an uptrend. Because they believe losers continue to drop, they may
choose to short-sell those securities.

Chapter 5: Investment in Bonds (Activity) - Dec. 07, 2020

1. WHAT IS COLLATERAL BOND?

 Collateral bond refers to the act of borrowing money with the borrower
offering an asset or a property as a security measure for the lender. If the
borrower fails to pay the debt on time, the lender acquires the asset or
property that the borrower put up as collateral.
2. What are the major types of bond?
 Corporate bonds - are debt securities issued by private and public
corporations.
 Investment grade - These bonds have a higher credit rating, implying less
credit risk, than high-yield corporate bonds.
 High-yield - These bonds have a lower credit rating, implying higher credit
risk, than investment-grade bonds and, therefore, offer higher interest rates in
return for the increased risk.
 Municipal bonds - called “munis,” are debt securities issued by states,
cities, counties and other government entities. Types of “munis” include:
 General obligation bonds - These bonds are not secured by any assets;
instead, they are backed by the “full faith and credit” of the issuer, which has
the power to tax residents to pay bondholders.
 Revenue bonds - Instead of taxes, these bonds are backed by revenues
from a specific project or source, such as highway tolls or lease fees. Some
revenue bonds are “non-recourse,” meaning that if the revenue stream dries
up, the bondholders do not have a claim on the underlying revenue source.
 Conduit bonds - Governments sometimes issue municipal bonds on behalf
of private entities such as non-profit colleges or hospitals. These “conduit”
borrowers typically agree to repay the issuer, who pays the interest and
principal on the bonds. If the conduit borrower fails to make a payment, the
issuer usually is not required to pay the bondholders.
 3. What are the safest type of bond?
 Treasuries are considered the safest bonds available because they are
backed by the “full faith and credit” of the U.S. government. They are quite
liquid because certain primary dealers are required to buy Treasuries in large
quantities when they are initially sold and then trade them on the secondary
market.
4. What is the riskiest type of bond?
 Corporate bonds: Bonds issued by for-profit companies are riskier than
government bonds but tend to compensate for that added risk by paying
higher rates of interest. In recent history, corporate bonds in the aggregate
have tended to pay about a percentage point higher than Treasuries of similar
maturity.

Chapter 5: Investment in Bonds (Review Exercise) - Dec. 07, 2020

1. How the zero coupon bond provide returns to investors?

 bonds sold at a deep discount from its face value and redeemed at maturity for
full face value.

2. What is the purpose of bond ratings?

 The ratings of the bonds sum up the majority of the factors which were examined
before. A bond rating is the grade given to bonds that indicates their credit
quality. Private independent rating services such as Standard & Poor's, Moody's
and Fitch provide these evaluations of a bond issuer's financial strength, or it’s
the ability to pay a bond's principal and interest in a timely fashion.

3. What is a key factor in analyzing bonds? Why?

 Analyzing these key components allows you to determine whether a bond is an

appropriate investment. A bond is trading at a discount if the price is lower than
its face value. This indicates the bond is paying a lower interest rate than the
prevailing interest rate in the market.

4. Distinguish between yield-to-call and yield-to-maturity.

 Yield to call (YTC) is a financial term that refers to the return a bondholder
receives if the bond is held until the call date, which occurs sometime before it
reaches maturity.
 The yield to maturity, book yield or redemption yield of a bond or other fixed-
interest security, such as gilts, is the internal rate of return earned by an investor
who buys the bond today at the market price, assuming that the bond is held until
maturity, and that all coupon and principal payments are made on schedule.
5. What is the difference between the market expectation theory and the liquidity
preference theory?

 The Liquidity preference theory, which states that the profile of yield curve
depends upon the liquidity premiums. If the investor does not consider short-
term and long-term bonds as the good substitutes for the investments he / she
may require the different yields to the maturity, similar to the stocks with high and
low Beta. Thus, Liquidity preference theory states that the yield curve of interest
term structure depends not only upon the market expectations, but upon the
spread of liquidity premiums between shorter-term and longer-term bonds.
 The Market expectations theory, which states that since short term bonds can be
combined for the same time period as a longer term bond, the total interest
earned should be equivalent, given the efficiency of the market and the chance
for arbitrage (speculators using opportunities to make money).

Psychological Aspects in Investment Decision Making

(Introductory Activity) - Dec. 14, 2020
1. Overconfidence - refers to the phenomenon that people's confidence in their
judgments and knowledge is higher than the accuracy of these judgments. To
investigate this effect, the subjective judgment of confidence in the correctness of a set
of answers is compared with the objective accuracy of these answers.
2. The disposition effect - is an anomaly discovered in behavioral finance. It relates to
the tendency of investors to sell assets that have increased in value, while keeping
assets that have dropped in value.
3. Perceptions of Investment Risk - The concept 'risk perception' means the way in
which investors view the risk of financial assets, based on their concerns and
experience. ... Usually, the investors are evaluating the risk and return of an investment
decisions. The decision making behavior of an investor is affected by their attitude
towards risk.

Activity: Dec. 21, 2020

please define the following:

1. Capital Budgeting Decisions - is a long term Investment decisions is called capital
budgeting Decision which involves huge amounts of long term Investment and are
irreversible expect at huge cost.
2. Capital Structure Decisions - Capital Structure Decisions or financing decision is a
financial decision which is concerned with the amount of finance to be raised from
various long term sources of funds like equity, shares, preferences shares , debentures,
bank, loans etc. Is called financing decision. In the other words it is a decision on the
capital structure of the company
3. Dividend Decisions - is a financial decision which is concerned with deciding how
much of the profit earned by the company should be distributed among shareholder
( dividend) and how much should be retained for the future contingencies ( retained
earnings) is called dividend decision.
Investment Decision Making:
Reaction Video Activity:

1. What are the 6 factors affecting decision making?

1. FINANCIAL GOALS
2. TIME
3. Risk Profile
4. Emotional Factors
5. Plan for emergencies
6. External Factors
2. Please define each based on your own understanding?
1. Financial Goals - for it refers to a set of goals where it shows how a person
spend or diversify his money.
2. Time - this factor shows that every person set time on how they make an
action in planning when it comes to investing.
3. Risk Profile - it refers to every profile of a person when it comes to investment
profile should be considered as the important thing to see because they are the
one who handle your money.
4. Emotional Factors - when it comes to investment we tend to make decision
based on our emotion without taking any valuable information.
5. Plan for Emergencies - it refers to having some plans that can be used in
future issues.
6. External Factors – is all about some issues outside the company or
businesses that can affect the operations. And also the decision-making of a
person of how they react based on the situation.

Chapter Requirement on Portfolio Management and Evaluation:

Differentiate:
1. Active versus passive portfolio management

 Active portfolio management focuses on outperforming the market in comparison

to a specific benchmark such as the Standard & Poor's 500 Index.
 Passive portfolio management mimics the investment holdings of a particular
index in order to achieve similar results.

2. Strategic versus tactical asset allocation

 Strategic asset allocation is a target allocation of asset classes you expect to

have in place for a long period of time.
 Tactical allocation allows an investor to move into and out of or overweight and
underweight certain areas of the market.
3. Monitoring and revision of the portfolio

 Changes in market conditions

 Changes in investor’s circumstances
 Asset mix in the portfolio
4. Portfolio performance measures.

 Jack L. Treynor was the first to provide investors with a composite measure of
portfolio performance that also included risk. Treynor's objective was to find a
performance measure that could apply to all investors regardless of their
personal risk preferences. 

Treynor Measure =PR−RFR

β
where:
PR=portfolio return
RFR=risk-free rate
β=beta

Define the following key terms:

 Asset classes - An asset class is a grouping of investments that exhibit similar
characteristics and are subject to the same laws and regulations.
 Asset allocation - Asset allocation is an investment strategy that aims to
balance risk and reward by apportioning a portfolio's assets according to an
individual's goals, risk tolerance, and investment horizon. 
 Sharpe’s ratio - The Sharpe ratio adjusts a portfolio’s past performance—or
expected future performance—for the excess risk that was taken by the investor.
 Treynor’s ratio - The Treynor ratio is a risk/return measure that allows investors
to adjust a portfolio's returns for systematic risk.
 Jensen’s Alpha - Jensen's measure is commonly referred to as alpha. When a
manager outperforms the market concurrent to risk, they have "delivered alpha"
to their clients.
 Benchmark portfolios - Benchmark portfolios are custom-tailored performance
benchmarks that reflect the style of an investment manager. They allow for more
meaningful evaluation of portfolio performance because they separate the results of
investment style from those of investment decision-making.
 Tracking error - Tracking error is the divergence between the price behavior of a
position or a portfolio and the price behavior of a benchmark. 
 Constant proportion portfolio method - Constant Proportion Portfolio
Insurance (CPPI) allows an investor to maintain exposure to the upside potential
of a risky asset while providing a capital guarantee against downside risk.
 Constant Beta portfolio method - In finance, the beta (β or market beta or beta
coefficient) is a measure of how an individual asset moves (on average) when
the overall stock market increases or decreases. Thus, beta is a useful measure
 of the contribution of an individual asset to the risk of the market portfolio when it
is added in small quantity. 
 Indexing method - The indexing method means the approach used to measure
the amount of change, if any, in the index. Some of the most common indexing
methods include ratcheting (annual reset), and point-to-point.
 Rebalancing a portfolio - Rebalancing is the act of adjusting portfolio asset
weights in order to restore target allocations or risk levels over time.
 Portfolio monitoring - Portfolio monitoring acknowledges that the markets and
clients change and that both must be reviewed periodically to ensure that the
portfolio remains appropriate for the client's situation.
 Portfolio revision - The process of addition of more assets in an existing
portfolio or changing the ratio of funds invested is called as portfolio revision.
 Strategic asset allocation - Strategic asset allocation is a target allocation of
asset classes you expect to have in place for a long period of time.
 Tactical asset allocation - Tactical allocation allows an investor to move into
and out of or overweight and underweight certain areas of the market.
 Active portfolio management - Active management portfolios strive for superior
returns but take greater risks and entail larger fees.
 Passive portfolio management - Passive management replicates a specific
benchmark or index in order to match its performance.

Chapter Requirement on Using Options as Investments:

1. What is an investment option?

 Investment Option means an investment fund, index or vehicle selected by the

Committee and made available to Participants for the deemed investment of their
Accounts.
2. Define:
Option Buyer - An Option Buyer is someone who buys an option from sellers/ writer.
The buyer of an option pays a premium and buys the right of that particular option but is
not obliged to writer to exercise the option.
Option Writer - Option writers collect a premium in exchange for giving the buyer the
right to buy or sell the underlying at an agreed price within an agreed period of time.
European Options - A European option is a version of an options contract that limits
execution to its expiration date. In other words, if the underlying security such as a stock
has moved in price an investor would not be able to exercise the option early and take
delivery of or sell the shares. 
American Options - An American option is a version of an options contract that allows
holders to exercise the option rights at any time before and including the day of
expiration.
Define the following key terms:
* American options
• "At the money“ - An equity call or put option is at-the-money when its strike price is
the same as the current underlying stock price.
• Black-Scholes model - A pricing model that is based on factors that include the strike
price, the price of the underlying security, the length of time until expiration, and
volatility. Read about the Black Scholes Pricing Model
• Call option - An equity option that gives its buyer the right to buy 100 shares of the
underlying stock at the strike price per share at any time before it expires. The call seller
(or writer), on the other hand, has the obligation to sell 100 shares at the strike price if
called upon to do so.
• European options - A European option is a version of an options contract that limits
execution to its expiration date.
• Exercise price (strike price) - A term of any equity option contract, it is the price per
share at which shares of stock will change hands after an option is exercised or
assigned. Also referred to as the “strike price,” or simply the “strike.”
• Expiration date - The day on which an option contract literally expires and ceases to
exist. For equity options, this is the Saturday following the third Friday of the expiration
month. The last day on which expiring equity options trade and may be exercised is the
business day prior to the expiration date, or generally the third Friday of the month.
• "In the money“ - An equity call contract is in-the-money when its strike price is less
than the current underlying stock price. An equity put contract is in-the-money when its
strike price is greater than the current underlying stock price.
• Intrinsic value of option - The in-the-money portion (if any) of a call or put contract’s
current market price.
• Hedger - An investment technique used to reduce the risk of holding a specific
investment. Options are commonly used as hedging tools: protecting another's existing
position or a position in another financial instrument such as stock.
• Hedging - Hedging is a strategy that tries to limit risks in financial assets.
• Hedge ratio - The hedge ratio compares the amount of a position that is hedged to the
entire position.
• Option - An option is a contract that gives a buyer the right to buy or sell shares of the
underlying asset at a predetermined price called the strike price within a certain period
of time.
• Option buyer - An Option Buyer is someone who buys an option from sellers/ writer.
The buyer of an option pays a premium and buys the right of that particular option but is
not obliged to writer to exercise the option.
• Option premium - Option premium will consist of extrinsic, or time value for out-of-
the-money contracts and both intrinsic and extrinsic value for in-the-money options.
• Option writer - Option writers collect a premium in exchange for giving the buyer the
right to buy or sell the underlying at an agreed price within an agreed period of time.
• "Out of money“ - An equity call option is out-of-the-money when its strike price is
greater than the current underlying stock price. An equity put option is out-of-the-money
when its strike price is less than the current underlying stock price.
• Riskless (perfect) hedge - A perfect hedge is a position undertaken by an investor
that would eliminate the risk of an existing position, or a position that eliminates all
market risk from a portfolio. In order to be a perfect hedge, a position would need to
have a 100% inverse correlation to the initial position.
• Perfect hedge ratio - The optimal hedge ratio or minimum variance hedge ratio is a
concept that defines the degree of correlation between an asset or liability and the
financial product (normally a futures contract) purchased to hedge financial risks.
• Put option - A put option is an option contract giving the owner the right, but not the
obligation, to sell a specified amount of an underlying security at a specified price within
a specified time. This is the opposite of a call option, which gives the holder the right to
buy shares.
• Profit or loss on option - Options contracts and strategies using them have defined
profit and loss—P&L—profiles for understanding how much money you stand to make
or lose. Depending on the options strategy employed, an individual stands to profit from
any number of market conditions from bull and bear to sideways markets.
• Straddle - A straddle refers to an options strategy where the investor holds a position
in both call and puts with the same strike price and expiration. The idea is to capitalize
in a strong move in either direction. You can have both a long straddle and a short
straddle position.
• Time value - For a call or put, it is the portion of the option’s premium (price) that
exceeds its intrinsic value (in-the-money amount), if it has any. By definition, the
premium of at- and out-of-the-money options consists only of time value. It is time value
that is affected by time decay as well as changing volatility, interest rates and dividends.
• Underlying security - The stock on which a specific equity option’s value is based,
which changes hands when the option is exercised or assigned.