FIN-340 at Southern New Hampshire University introduces and examines various investment vehicles, including stocks, bonds, mutual funds and commodities. SNHU's catalog says the course emphasizes the decision-making process behind all investment decisions. FIN 320 is the listed prerequisite.
The difficulty is moving from product descriptions to judgment. You compare instruments with different risks, returns and costs, and justify choices for a stated investor and goal.
Course at a Glance
| Item | Details |
|---|---|
| University | Southern New Hampshire University (SNHU) |
| Course code | FIN-340 |
| Level and credits | Undergraduate, 3 credits |
| Prerequisite | FIN 320 |
| Subject area | Investments |
| Typical work | Valuation problems, portfolio decisions, written investment recommendations |
What FIN-340 Covers
| Topic from the catalog | In plain terms |
|---|---|
| Stocks | Ownership shares and how they are valued |
| Bonds | Loans to issuers with interest and principal |
| Mutual funds | Pooled portfolios managed for investors |
| Commodities | Physical goods traded as investments |
| Decision-making process | Linking goals, risk and choice of instrument |
Key Concepts Explained
Bond Pricing
A bond is worth the present value of its coupon payments plus its face value, discounted at the market yield. When yields rise above the coupon rate, price falls below face value.
Example: A 3-year bond with $1,000 face value and a 5% annual coupon pays $50 each year plus $1,000 at the end. At a 6% yield, price = 50/1.06 + 50/1.06^2 + 1,050/1.06^3, about $973. Because 6% is above the 5% coupon, the bond sells below $1,000.
Risk, Return and Diversification
Expected return of a portfolio is the weighted average of its parts. Spreading money across assets that do not move together reduces risk without necessarily reducing expected return.
Example: A portfolio is 60% in a stock fund expected to return 8% and 40% in a bond fund expected to return 4%. Expected return = 0.60 x 8% + 0.40 x 4% = 6.4%.
Matching Investments to the Investor
The right choice depends on goals, time horizon and tolerance for loss. State these before recommending anything.
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| Valuation | Pricing stocks and bonds | Draw cash flows, then discount |
| Portfolio task | Risk and return | Calculate weights and expected return, then discuss risk |
| Investor case | Suitability | List goals and constraints before choosing |
| Final write-up | Justification | Recommendation, evidence, risks |
Building an Investor Profile
| Factor | Question | Effect on choice |
|---|---|---|
| Goal | What is the money for? | Growth or income focus |
| Horizon | When is it needed? | Longer horizons can tolerate more volatility |
| Risk tolerance | How much loss is acceptable? | Mix of stocks and bonds |
| Liquidity | How fast is access needed? | Cash and easily sold assets |
| Costs and taxes | What reduces returns? | Fund fees, account type |
Use these headings in a case answer so each recommendation traces back to the investor's situation. This is general study guidance, not personal financial advice.
A Study Plan and Worked Example
| Vehicle | Return comes from | Main risk |
|---|---|---|
| Stocks | Price change and dividends | Price volatility |
| Bonds | Coupons and principal | Interest rate and credit risk |
| Mutual funds | Pooled holdings | Market risk and fees |
| Commodities | Price change | No income, volatile prices |
Worked example (fees): Two funds earn the same 7% before costs. Fund A charges 0.2% a year and fund B charges 1.2%. Over 20 years on $10,000, A grows at 6.8% to roughly $37,000 while B grows at 5.8% to roughly $30,900. The difference comes only from costs, which is why fee comparison belongs in every recommendation.
Where Students Get Stuck
- Bond price and yield direction. They move in opposite directions.
- Confusing expected and realized return. One is a forecast, the other a result.
- Ignoring costs. Fees reduce returns.
- One-size answers. Always tie the choice to a stated investor.
Study Tips for FIN-340
- Practice bond pricing until the steps are automatic.
- Make a comparison table of the four vehicles: return source, risk, liquidity, costs.
- Check every result for reasonableness.
- Review FIN-320 time value before starting.
How We Help with FIN-340
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Frequently Asked Questions
FIN 320, per the SNHU catalog.
The catalog names stocks, bonds, mutual funds and commodities.
It includes valuation calculations, but the catalog stresses the decision-making process.
Future payments are discounted at a higher rate, so their present value is lower.
Holding assets that do not move together to reduce overall risk.
Yes, with explanation and feedback. You complete and submit your own work.