| Course | FIN 340 Fundamentals of Investments |
|---|---|
| Module | Module 1 |
| Paper type | undergraduate discussion post on investment goals and risk |
| Length | About 340 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Finance |
| Updated | October 2026 |
Free sample paper for FIN 340 Module 1
Module One Discussion
One Market Drop, Two Different Risks
In this course I will follow two composite clients of a fee-only advisory practice in Keene, New Hampshire. Tessa Lindqvist is a 29-year-old dental hygienist earning about $72,000. She has $18,000 in a savings account and has just joined her employer's 401(k), but she told the adviser she "can't stand the idea of losing money." Gordon and Renee Abernathy, 57 and 55, have about $860,000 in retirement accounts and a brokerage account and hope to retire within eight years.
Suppose stocks fall 20 percent next year. For Tessa, whose retirement is more than 35 years away, that drop affects a small balance and gives her new contributions a lower price; it is almost irrelevant to her final outcome. Her monthly contributions would simply buy more shares while prices are low. For the Abernathys, a 20 percent fall in the stock part of their savings just before retirement could force them to work longer or spend less, because they will soon start withdrawing. Markowitz (1952) framed investing as choosing the best trade-off between expected return and variance, but what counts as "too much variance" depends on when an investor needs the money.
It helps to separate willingness to take risk from ability. Grable and Lytton (1999) built a questionnaire to measure willingness because people's comfort with loss varies widely. Tessa scores low on willingness but very high on ability: steady income, a long horizon and no debt beyond a car loan. The Abernathys feel comfortable with stocks but have less ability to recover from a loss. Tessa also faces a risk she does not see. With inflation near 3 percent and her savings account paying less, her cash is slowly losing purchasing power. Benartzi and Thaler (2001) found that many 401(k) savers simply spread money evenly across whatever funds are offered, so without a plan, Tessa's mix may be set by her plan's menu, not her goals.
Which worries you more for your own savings: a large market drop or prices rising faster than your money grows?
References
Benartzi, S., & Thaler, R. H. (2001). Naive diversification strategies in defined contribution saving plans. American Economic Review, 91(1), 79-98. https://doi.org/10.1257/aer.91.1.79
Grable, J., & Lytton, R. H. (1999). Financial risk tolerance revisited: The development of a risk assessment instrument. Financial Services Review, 8(3), 163-181. https://doi.org/10.1016/S1057-0810(99)00041-4
Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91. https://doi.org/10.1111/j.1540-6261.1952.tb01525.x
What the FIN 340 Module 1 instructions ask for
The first FIN 340 discussion typically asks why people invest instead of only saving, what investment goals look like at different stages of life and how risk and return are related. Some prompts invite you to describe your own goals or a family member's, while others ask you to define risk tolerance or explain why young investors are usually advised to hold more stocks. The best initial posts move past "higher risk, higher return" to show how goals, time horizon and the need for money shape what risk means for a particular person. Plan for a few hundred words, a credible source or two and replies that ask classmates something about their own examples.
How this FIN 340 Module 1 discussion example is built
The sample introduces the two composite clients who appear throughout the course. Tessa Lindqvist, a 29-year-old hygienist, keeps $18,000 in a savings account and fears losing money in the market. Gordon and Renee Abernathy, 57 and 55, have $860,000 saved and want to stop working within eight years. The post explains that a 20 percent fall in stocks would barely matter to Tessa's retirement decades away but could delay the Abernathys' retirement. It separates willingness to take risk, which Tessa lacks, from ability to bear it, which she has in abundance, and notes that inflation is the bigger danger for her cash. It closes by asking classmates which kind of risk worries them more.
Where the FIN 340 Module 1 rubric puts the points
Rubrics for this discussion generally assess understanding of investment goals and the risk and return trade-off, application to a person or scenario, use of sources and engagement with classmates. Posts in the top band explain that risk depends on the investor's time horizon and needs, distinguish willingness from ability to take risk and recognize that holding cash carries its own risk through inflation. Posts lose points for generic definitions with no example, for treating risk tolerance as a single number and for replies that simply praise a classmate's post. Clear writing, an APA citation and a question that invites a response round out the grade. A post that explains which client could recover from a loss, and why, usually shows the depth instructors are looking for.
FIN 340 Module 1 help: the mistakes that cost points
Many students answer this prompt with a textbook definition of risk followed by a list of investment types. Make it personal instead: describe one or two investors in enough detail that a reader could advise them. Ask what each person is investing for, when they will need the money and how they would react to a large loss. Then show that those answers point to different portfolios. Mention inflation, because many cautious investors overlook it. Keep numbers simple, such as a balance and an age, but specific. In replies, pick up a detail from a classmate's example and ask how a large market drop would change their plans, which keeps the discussion on goals.
Get FIN 340 Module 1 written to your instructions
Send the FIN 340 Module 1 prompt and anything you want to say about your own goals. The reply is built around believable investors, frames risk the way they would feel it and ends by inviting classmates in. Allow roughly 48 hours; the opening post costs you nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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FIN 340 Module 1 questions, answered
Where can I find a free FIN 340 Module 1 Discussion sample?
This page has the complete FIN 340 Module 1 post, which uses two composite clients to show why risk means different things at 29 and at 57.
What is the difference between willingness and ability to take risk?
Willingness is how comfortable an investor feels with losses; ability is how much loss their finances, income and time horizon can absorb without harming their goals.
Why do younger investors usually hold more stocks?
They have decades before they need the money, so they can wait out market declines, and stocks have historically earned more than bonds or cash over long periods.
Is keeping money in cash risk free?
Not entirely. Cash avoids market losses but usually earns less than inflation over long periods, so its purchasing power shrinks.
What is the risk-return trade-off?
The principle that investments offering higher expected returns usually come with greater uncertainty about the outcome, so investors must decide how much uncertainty to accept.