In Learning Module: Financial Market Effects on Industry Trends, you  will learn about the relationship between risk and return. Generally  speaking, the more risk that an investor takes, the higher the return.  Risk is measured by the standard deviation and variance. You will learn  about the different types of risk and how unsystematic risk can be  reduced or eliminated through diversification. Systematic risk, on the  other hand, can’t be eliminated. It is the risk that comes with  investing.

You will learn how to calculate the return of a portfolio and the  expected return of a portfolio, and how individual stocks and stock  portfolio’s experience volatility. Systematic risk can be measured which  allows the comparison of returns from individual stocks to the market.  The capital asset pricing model puts these concepts together and serves  as a way calculate the expected return of any investment.

Resources

• Modules: 
  • Planning
  • Working Capital
  • Risk and Return
  • Understanding Returns
  • Approaches to Calculating the Cost of Capital
• Bible

Learning Module Activity Path: Financial Market Effects on Industry Trends

Devotional

Deuteronomy 10: 11-12

Devotional Introduction

No Risk No Reward

Generally speaking, in the financial markets, the greater the risk,  the greater the return. Unfortunately, the opposite is also true, with  large risks comes the possibility of large losses. The relationship  between risk and reward is important for marketing professionals to  understand.

Risk can’t be avoided. Getting out of bed in the morning entails  risk. So does staying in bed. It is a part of life and an ever-present  reality of the financial markets. Figure 1 of Chapter 19 on page 863  shows the historical returns of different investments. The riskiest  investment on the chart is small stocks that had the highest return. It  also had the most volatility. Investors in small stocks have to be  willing to hold their stock for long periods of time and endure periods  of significant losses to achieve the higher returns. Even though small  stocks experienced significant losses during this time period, the gains  far exceeded the losses.

Moses and the Israelites understood risk and reward. Moses and Aaron  took great risks in repeatedly approaching pharaoh to secure the  Israelites freedom from slavery. After leaving Egypt, the Israelites  faced a significant risk and reward decision in deciding whether or not  to enter the Promised Land. The first generation chose not to trust God  and take the risk. They suffered the loss of wondering in the desert for  40 years and dying there. The second generation wisely chose to trust  God.

Deuteronomy 10: 11-12 says, 11”Go, the Lord said to me, ‘and lead the  people on their way, so that they may enter and posses the land that I  swore to their fathers to give them.’ 12And now, O Israel, what does the  Lord your God ask of you but to fear the Lord your God, to walk in all  his ways, to love him, to serve the Lord you God with all your heart and  with all your soul…” (Deuteronomy 10: 11-12, NIV).

For the Israelites, and you and me, all God asks of us is to trust  him, to walk in his ways, to love him, and to serve him with all of our  heart and soul. If we take this risk, we receive the reward of eternal  life. Unlike the financial markets where the possibility of loss comes  with taking risk, in the economy of eternity, trusting God has no  downside. We are promised to spend eternity with him.

Upon completion of this assignment, you should be able to:

• Incorporate Biblical and ethical principles into the relationship between risk and reward.

Resources

• Website: www.biblestudytools.com
• Textbook: Horngren’s accounting (11th ed.); Fundamentals of corporate finance (3rd ed.)
• Bible

Instructions

1. Review Figure 1 on page 863 of the textbook.
2. Read Deuteronomy 10: 11-12.
3. Questions to consider: 
   1. How do long-term investment returns relate to Deuteronomy 10: 11-12?
   2. What lessons can marketing executives learn about risk and reward from Deuteronomy 10: 11-12?
   3. Have you taken the risk to receive God’s promise of eternal life?

Read, review, and check for understanding:

Planning

Working Capital

Risk and Return

Understanding Returns

Approaches to Calculating the Cost of Capital

Assessment One

Instructions

Assessment One Instructions

Complete all previous activities in the Learning Module Path: Evaluate Financial Market Effects on Industry Trends.
Select one topic from the Learning Module: Evaluate Financial Market Effects on Industry Trends.
Create a video journal and address these points:
As an entry-level professional.
As a mid-level professional.
As an executive-level professional.
Identification: Identify the topic and explain why you believe the topic is important.
Explanation: Explain the calculations or concepts, and how it can be used in decision-making.
Application: Assuming your audience knows nothing about the topic, explain how to apply it:
Ethics: Identify 1 ethical issue related to this topic and explain how you would address it.
Process
Develop a rough idea of what you want to do.
Create a storyboard to further organize and refine your thoughts.  
Requirements:
The video should be between 5 minutes and 7 minutes long.
A minimum of 7 slides. You may choose any form of presentation
software. You will post the URL for the instructor to review. 1 slide
for the introduction and 1 slide for references with at least 5 for the
body.
A minimum of 2 references from the Skyepack modules associated with this Learning Module.
A minimum of 1 reference from the Bible.
Submit a Word document with your name and the URL for your presentation in submit assignments.
When you have completed your assignment, save a copy for yourself and submit a copy to your instructor using the Financial Market Effects on Industry Trends Assignment Submission Page by the end of week 6.

Assessment Rubric