Instructions:

• Complete Module 3- Handout #3 Handout (Mortgage calculation spreadsheet) by watching the video for this handout.
• Make sure that the numbers in your spreadsheet match those in the video.
• Make the following changes in your spreadsheet:
  • Home value: $750,000
  • Down Payment: 25%
  • Interest Rate: 3.75%
• Calculate the total interest payment (in Cell I8)
• Once you are done with the changes and the calculations, upload your spreadsheet as Last Name-First Name- FIN 502-Homework#3-Excel

Submission Instructions:

Please submit your appropriately named Excel spreadsheet on Canvas by the due date. All late submissions will earn zero points.

Grading Rubric

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Your assignment will be graded according to the grading rubric below.

Part	100% complete + 100% correct	100% complete but contain one or more errors	Incomplete (some work done)	Blank, submitted late, or not submitted
Monthly mortgage payments and total interest payments	5 (points)	3.5	2.00	0
Amortization table: Beginning loan balance and interest	5	3.5	2.00	0
Amortization table: Principal and Ending loan balance	5	3.5	2.00	0

The rubric above assumes that (as required in the project instructions), all Excel calculations are made using formulas and cell references (i.e., no hard coding). If a calculation contains hard-coded inputs or the result appears with no Excel formulas entered, it will earn zero points.

Module 3: CL Discussion 3 –The 60/40 Portfolio is Alive and Well

Class and Life Discussion – The 60/40 Portfolio is Alive and Well

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Assigned Reading/Video:

YouTube Link:

(Rob Berger, November 17, 2022)[youtube]

Here are a few prompts to help you come up with some topics to talk about:

Prompt 1 Why Is It Always the 60/40?

Berger begins by observing that everyone is debating whether the 60/40 portfolio is dead but nobody seems concerned about the 70/30 or the 80/20. Why do you think weve settled upon the 60/40 split as the one true measure of balanced investing? Is this number somehow special mathematically or behaviorally, or is it just a convention that developed cultural headway?

Prompt 2 Contextual Performance

Berger shows that a 100 percent stock portfolio had about 1 percentage point higher compound annual return than the 60/40 but much more volatility. For a retiree taking distributions from a portfolio, what is the significance of that volatility differential even when the difference in returns appears minor on paper? Connect this to sequence-of-returns risk.

Prompt 3 The Dead Argument

What critics of the 60/40 portfolio point to are rising interest rates, high inflation and the stock-bond correlation breaking down in 2022. How does Berger respond to such critiques? Do any of his counter-arguments strike you as persuasive, and in what specific scenarios would you say the 60/40 is no longer a valid default allocation?

Prompt 4: The Purpose of Bonds in a Portfolio

After a rough year for fixed income, Berger contends that bonds still fulfill their primary role serving as ballast in ebbs in equities. How does the purpose of bonds change if you are an investor in the accumulation phase versus a retiree, who is taking distributions that requires immediate liquidity? Does the 60/40 apply equally well to both stages of the investment lifecycle?

Prompt 5 www. portfoliovisualizer. com as an Analytical Tool

The video highlights portfoliovisualizer. com, a free tool for backtesting portfolio allocations. This is used by Berger to illustrate historical performance for different stock/bond splits. What can backtested data tell you about a forward-looking portfolio allocation decision, and what are its strengths and weaknesses? At what point does historical evidence become bad advice?

Prompt 6 The Discipline Dividend and Rebalancing

A 60/40 allocation, requires periodic rebalancing selling equities when they outperform and buying bonds when stocks drop. Behaviorally, this is counterintuitive. Systematic rebalancing is widely described at an implicit form of buy low, sell high yet few individual investors are able to do so consistently because cultural limitations prevent them from doing it.

Prompt 7 The Effect of Inflation on the Bond Portion

A key critique of the 60/40 is that real bonds will lose value during times when inflation runs high, essentially diminishing the diversification benefit. How do the decisions concerning which bonds short-duration vs. long-duration, nominal vs. TIPS, investment-grade vs. high-yield change the inflation resilience of that 40 percent fixed income sleeve?

Prompt 8 The International Diversification Question

Bergers analysis primarily targets U.S.-based portfolios. Does the 60/40 idea work equally well for investors in such countries particularly those with smaller, more concentrated equity markets or different interest rate regimes? What changes would you introduce to the 60/40 framework for a high-inflation investor in an emerging market?

Prompt 9 Alternatives for the New 40?

Now, many financial advisors recommend swapping out the bond sleeve for alternative assets private credit, real estate, commodities or hedge fund strategies arguing that they will provide better diversification and return potential in a post-ZIRP environment. Evaluate this argument. What risks is an investor taking by replacing alternatives for traditional bonds, and how does liquidity factor into that analysis?

Prompt 10 Take It Personal

In light of Berger’s analysis, how would you personally position your stock/bond allocation as a 35-year-old with an income history and 30 years left to invest or as a fresh new retiree at age 65? Using at least two concepts from this course (for example: risk tolerance, time horizon, expected return, Modern Portfolio Theory), explain how you came to the conclusion that you did.

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Assignment Overview

This discussion board assignment requires you to engage critically with assigned course material and participate meaningfully in scholarly dialogue with your peers. You will submit two posts: one original post analyzing the assigned material, and one response post engaging with a classmate’s analysis.

Part 1: Original Post (12 points)

Objective

Provide a substantive analysis of the assigned material that demonstrates critical thinking, application of course concepts, and professional communication skills.

Requirements

Content Expectations:

• Present your key takeaway or perspective on the assigned material
• Explicitly connect your analysis to relevant course concepts, theories, or frameworks
• Support your position with specific evidence from the source material
• Write as if presenting your professional opinion to a supervisor in a business meeting

Technical Specifications:

• Recommended length: 150-500 words
• Minimum course concepts: Reference at least 2 specific finance theories, models, or principles
• Minimum source references: Include at least 2 specific citations from the assigned material (e.g., data points, timestamps, examples)

Quality Standards:

• Demonstrate original thinking and personal analysis
• Maintain professional tone and academic writing standards
• Ensure clarity, organization, and grammatical accuracy

Part 2: Response Post (8 points)

Objective

Engage substantively with a classmate’s original post to advance the intellectual discourse and demonstrate collaborative learning.

Requirements

Formatting:

• Title format (required): “Response Post to the Original Post by [Classmate First Name Last Name]”
  • Example: “Response Post to the Original Post by Serkan Karadas”

Content Expectations: Your response must go beyond simple agreement or disagreement. Substantive engagement includes:

• Explaining the reasoning behind your agreement or disagreement with specific points
• Introducing additional examples, data, or perspectives that extend the discussion
• Connecting your classmate’s analysis to other course concepts or real-world applications
• Asking thoughtful follow-up questions that deepen the conversation

What Does NOT Constitute a Valid Response:

• “I agree with you.”
• “Good post.”
• “I feel the same way.”

What DOES Constitute a Valid Response:

• “I agree with your application of Modern Portfolio Theory here, and I would like to add that…”
• “While I appreciate your perspective on diversification, I interpret the data differently because…”
• “Building on your point about risk-return tradeoffs, have you considered how this applies to…”

Technical Specifications:

• Minimum length: 100 words
• Tone: Professional, respectful, and collegialeven when expressing disagreement

Submission Requirements and Policies

Posting Sequence

• You must submit your original post before viewing other students’ posts (enforced by Canvas settings)
• This ensures independent thinking and prevents echo-chamber effects

Deadlines

• Strongly encouraged: Submit your original post by 11:59 PM CST on Day 4
  • Early posting allows adequate time for peer engagement and thoughtful responses
• Official deadline: Both original post and response post are due by 11:59 PM CST on Day 7
• Late submissions: 10% penalty per day late

Response Post Protocol

• You must respond to a different classmate’s original post (not your own)
• Exception: If you are the only student with an original post close to the deadline, you may respond to your own post as a last resort
  • However, you should check Canvas periodically before the deadline to respond to a classmate if possible
  • Example: If you post on Day 6 and no other posts are visible, check again on Day 7 before responding to yourself

Grading Philosophy

Academic Rigor

This assignment values thoughtful, well-supported, and relevant contributions over “right” or “wrong” answers. Your grade will reflect:

• Depth of critical analysis
• Quality of evidence and reasoning
• Effective application of course concepts
• Professional communication skills
• Meaningful peer engagement

Collaborative Learning

Responses that help clarify, synthesize, or extend your classmates’ ideas demonstrate that you have carefully read and thoughtfully considered their contributions. Such responses fulfill the highest standards of the grading rubric.

Professional Discourse

• Expressing disagreement: State your position clearly and politely, supporting it with evidence and reasoning
• Maintaining respect: Avoid language that could be perceived as dismissive, condescending, or offensive
• Conflict resolution: Should disagreement escalate to conflict, initiate immediate resolution and offer apologies for any personal contribution to the situation

Example Scenario

Class composition: Five students (A, B, C, D, E)

Required submissions:

• Each student submits one original post (5 total original posts)
• Each student submits one response post to a different student’s original post

Example:

• Student A submits an original post
• Student A reads all available original posts
• Student A submits a response post to Student E’s original post
• Student A has now fulfilled both requirements

Tips for Success

1. Prepare thoroughly: Review the assigned material carefully and take notes on key concepts
2. Draft externally: Write your posts in Microsoft Word or Google Docs to check word count and spelling
3. Cite specifically: Reference exact data points, timestamps (for videos), or quotes from the material
4. Name concepts explicitly: Don’t just allude to course materialname the specific theories or models you’re applying
5. Proofread carefully: Review for grammar, spelling, and clarity before posting
6. Engage authentically: Read your classmates’ posts carefully and respond thoughtfully
7. Post early: Submitting your original post by Day 4 allows time for rich peer discussion

Grading Criteria

Original Post (12 points total)

1. Word Count Requirement (2 points)

• 2 points: Original post is between 150-500 words
• 0 points: Original post is less than 150 words or more than 500 words

Rationale: Ensures substantive content without excessive length. Too short = insufficient depth; too long = lack of conciseness.

2. Course Concept Integration (3 points)

• 3 points: Explicitly mentions and applies at least 2 specific finance concepts, theories, or models from the course (e.g., Modern Portfolio Theory, efficient frontier, diversification, risk-return tradeoff, correlation, duration, etc.)
• 2 points: Mentions and applies 1 specific finance concept from the course
• 0 points: Does not explicitly mention or apply any course concepts

Must name the concept explicitly (e.g., “According to Modern Portfolio Theory…” or “The efficient frontier suggests…”)

3. Source Material Reference (2 points)

• 2 points: Includes at least 2 specific references to content from the assigned material (e.g., specific data points, arguments, examples, or timestamps from video)
• 1 point: Includes 1 specific reference to the assigned material
• 0 points: No specific references to the assigned material (only vague/general statements)

Example of specific reference: “Berger showed that the 60/40 portfolio returned X% over Y years using Portfolio Visualizer data” vs. vague: “The video talked about portfolios”

4. Personal Analysis/Opinion (3 points)

• 3 points: Clearly states a personal position/opinion AND provides at least 2 supporting reasons or pieces of evidence for that position
• 2 points: States a personal position but provides only 1 supporting reason
• 0 points: No clear personal position, or position stated without any supporting reasoning

The “supervisor test”: Would your response be adequate if your boss asked your professional opinion?

5. Professional Writing Quality (2 points)

• 2 points: Post has fewer than 3 grammatical/spelling errors AND is well-organized with clear paragraphs
• 1 point: Post has 3-5 grammatical/spelling errors OR lacks clear organization
• 0 points: Post has more than 5 grammatical/spelling errors OR is poorly organized/difficult to follow

Use spell-check and proofread before posting!

Response Post (8 points total)

6. Word Count Requirement (1 point)

• 1 point: Response post is at least 100 words
• 0 points: Response post is less than 100 words

7. Proper Formatting (1 point)

• 1 point: Response post is clearly titled: “Response Post to the Original Post by [Classmate First Name Last Name]”
• 0 points: Response post does not follow the required title format

8. Substantive Engagement (3 points)

• 3 points: Response includes at least 2 of the following:
  • Identifies a specific point from the classmate’s post and explains agreement/disagreement with reasoning
  • Asks a thoughtful follow-up question that extends the discussion
  • Provides a new example, data point, or perspective that builds on the classmate’s ideas
  • Connects the classmate’s post to a different course concept or real-world application
• 2 points: Response includes 1 of the above elements
• 0 points: Response is merely agreement/disagreement without explanation (e.g., “I agree with you” or “Good post”)

Simple agreement without explanation does NOT count as substantive engagement.

9. Professional Tone (1 point)

• 1 point: Response maintains a respectful, professional tone throughout (even if disagreeing)
• 0 points: Response includes unprofessional, disrespectful, or dismissive language

10. Writing Quality (2 points)

• 2 points: Response has fewer than 3 grammatical/spelling errors AND is clearly written
• 1 point: Response has 3-5 grammatical/spelling errors
• 0 points: Response has more than 5 grammatical/spelling errors

Total: 20 Points

ORIGINAL POST: 12 Points Total

• Word count (150-500 words): 2 points
• Course concepts (minimum 2 concepts): 3 points
• Source references (minimum 2 references): 2 points
• Personal analysis with support: 3 points
• Writing quality: 2 points

RESPONSE POST: 8 Points Total

• Word count (minimum 100 words): 1 point
• Proper formatting: 1 point
• Substantive engagement: 3 points
• Professional tone: 1 point
• Writing quality: 2 points

Examples of Meeting Criteria

Example 1: Course Concept Integration (3 points)

Insufficient (0 points): “The video talks about how portfolios should be balanced. I think this makes sense for investors.”

Meets requirement (3 points): “Berger’s analysis applies Modern Portfolio Theory (MPT), which suggests that combining assets with low correlation can reduce overall portfolio risk. The 60/40 allocation specifically leverages the historically negative correlation between stocks and bonds to optimize the risk-return tradeoff along the efficient frontier.”

Example 2: Source Material Reference (2 points)

Insufficient (0 points): “The video mentioned that the 60/40 portfolio has performed well historically.”

Meets requirement (2 points): “According to Berger’s Portfolio Visualizer data, the 60/40 portfolio has delivered an average annual return of approximately 9.5% since 1970 (timestamp 4:32). He also specifically addresses the 2022 criticism, noting that this was only the third time in history both stocks and bonds declined simultaneously (timestamp 7:15).”

Example 3: Substantive Engagement (3 points)

Insufficient (0 points): “I agree with your post. You made good points about the portfolio.”

Meets requirement (3 points): “I appreciate your point about the 60/40 portfolio’s resilience, but I’d like to offer a different perspective on the duration risk you mentioned. While you’re correct that rising rates hurt bond prices, the current yield environment in 2026 actually provides a cushion that wasn’t present in the 2010s. With 10-year Treasury yields around 4-5%, bonds now offer meaningful income that can offset price declines. This connects to our Week 2 discussion on yield-to-maturity calculations.

I’m curious: do you think investors should adjust the 40% bond allocation based on their age and time horizon? For example, should a 30-year-old investor reduce bond exposure given their longer investment timeline?”

(This response: 1) explains disagreement with reasoning, 2) provides new perspective with course concept, and 3) asks a thoughtful follow-up question = 3 elements = 3 points)

Frequently Asked Questions

Q: Do citations need to be in a specific format (APA, MLA, etc.)?

A: For discussion boards, formal citations are not required. However, you must make specific references to the source material (e.g., “According to Berger…” or “At timestamp 5:30, he mentions…”). If you use outside sources beyond the assigned material, provide the source name and/or link.

Q: What counts as a “course concept”?

A: Any finance theory, model, formula, or framework we’ve covered in class. Examples: Modern Portfolio Theory, CAPM, efficient market hypothesis, diversification, correlation, beta, duration, yield curve, risk premium, Sharpe ratio, etc. You must explicitly name the concept.

Q: Can I go over 500 words on my original post?

A: No. Posts over 500 words will receive 0 points for the word count criterion. Practice concisenessit’s a valuable professional skill.

Q: What if I post early and there are no classmates’ posts to respond to?

A: Check back before the deadline. Only respond to your own post as an absolute last resort if no other posts are available by the due date.

Q: How do I count words?

A: Write your post in Microsoft Word or Google Docs first, which will show the word count. Then copy and paste into Canvas.

Q: Can I respond to someone who already has several responses?

A: Yes, but consider responding to classmates who haven’t received responses yet to ensure everyone benefits from engagement.

Q: What if I disagree with the assigned material?

A: Thoughtful disagreement is welcome! Just make sure to support your position with reasoning and evidence. You’ll still meet the “source material reference” criterion by explaining what you disagree with and why.

Recommended Workflow

1. Watch/read the assigned material and take notes (30-45 minutes)
2. Identify 2-3 course concepts that relate to the material
3. Draft your original post in Word/Google Docs (30-45 minutes)
   • Start with your main opinion/takeaway
   • Support with course concepts and source references
   • Check word count (150-500 words)
   • Proofread
4. Post your original post on Canvas (ideally by Day 4)
5. Read classmates’ posts thoughtfully (15-30 minutes)
6. Draft your response post in Word/Google Docs (20-30 minutes)
   • Choose a post that interests you or that you can meaningfully engage with
   • Use the proper title format
   • Ensure you include at least 2 substantive elements
   • Check word count (minimum 100 words)
   • Proofread
7. Post your response on Canvas before the deadline

Total estimated time: 2-3 hours per discussion board assignment

Self-Assessment Tool

Before submitting your discussion board posts, complete this self-assessment:

ORIGINAL POST SELF-ASSESSMENT

Criterion 1: Word Count (150-500 words) – 2 points possible

• My word count: _____ words
• My self-assessment score: _____ out of 2 points

Criterion 2: Course Concepts (minimum 2) – 3 points possible

• Course concept 1: _______________________
• Course concept 2: _______________________
• My self-assessment score: _____ out of 3 points

Criterion 3: Source References (minimum 2) – 2 points possible

• Source reference 1: _______________________
• Source reference 2: _______________________
• My self-assessment score: _____ out of 2 points

Criterion 4: Personal Analysis with Support – 3 points possible

• My position/opinion: _______________________
• Supporting reason 1: _______________________
• Supporting reason 2: _______________________
• My self-assessment score: _____ out of 3 points__

Criterion 5: Writing Quality – 2 points possible

• Number of grammatical/spelling errors: _____
• My self-assessment score: _____ out of 2 points

ORIGINAL POST SUBTOTAL: _____ out of 12 points

RESPONSE POST SELF-ASSESSMENT

Criterion 6: Word Count (minimum 100 words) – 1 point possible

• My word count: _____ words
• My self-assessment score: _____ out of 1 point

Criterion 7: Proper Formatting – 1 point possible

• Is my title correct? (Yes/No): _____
• Required format: “Response Post to the Original Post by [First Name Last Name]”
• My self-assessment score: _____ out of 1 point

Criterion 8: Substantive Engagement (minimum 2 elements) – 3 points possible

• Element 1 included: _______________________
• Element 2 included: _______________________
• My self-assessment score: _____ out of 3 points

Criterion 9: Professional Tone – 1 point possible

• Is my tone professional and respectful? (Yes/No): _____
• My self-assessment score: _____ out of 1 point

Criterion 10: Writing Quality – 2 points possible

• Number of grammatical/spelling errors: _____
• My self-assessment score: _____ out of 2 points

RESPONSE POST SUBTOTAL: _____ out of 8 points

TOTAL SELF-ASSESSMENT SCORE: _____ out of 20 points

Grading Rubric

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Your assignment will be graded according to the grading rubric.

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