FINC20019 / FINC20007: Presentation and Written Assessment 1 Individual or Group Assignment. Due Week 7, Friday, 28 April 2017 at 5.00pm. Learning Outcomes Assessed 1 Explain classical and modern domestic and global operations of money and capital markets 2 Compute and explain financial institutions’ risk and return and their impact on firm value 3 Discuss the sources and applications of funds that are used to classify financial institutions and the services they offer 4 Describe and compute the value of financial institutions’ securities used to make financial decisions that maximise firm value This guide is split into 4 Sections. 1. Overview 2. Submission Details and Issues that will Impact on Your Mark 3. Assignment Questions 4. Mark sheet, Rubrics and APA Quick Reference Guide Section 1: Overview This is a group written assignment for on campus students. The group should consist of not more than 2 students. Distant learning (FLEX) students can also do this assignment in group of 2 but this is likely to be difficult and therefore can do this assignment individually. If students do this assignment as a group, only one member of the group will submit the assignment online by uploading it in Moodle. The marksheet of this assignment is your coversheet. The names of the students in the group must be clearly indicated, or if you are doing individually, your name is to be written on the marksheet. NB Students doing the assignment in group of 2, with both names on the marksheet, you are acknowledging that both of you would have contributed almost similar amount of time and effort and that the same mark will be awarded to both. Should one student believes he/she should get more marks than the other student, both of you must make a signed declaration of how the marks are to be divided and this pdf declaration is to be upload separately on the Moodle site. The task requires students to provide comprehensive answers / solutions to the 3 Questions below. The questions have been sourced from the prescribed textbook (8 th edition and/ or 7 th edition). For each question, your answer must be confined to:  2 -3 pages of text (i.e. no more than 950 words) in essay style  1 page for references (use only APA referencing) AND 1-2 pages for appendix [optional] A detailed rubric is provided at the end of this document. The rubric describes the measures of excellence and shows how the marks are distributed for each question. However in summary marks are awarded for:  clarity of explanations demonstrating a well-planned essay  useful paraphrasing from other sources including the textbooks ad APA Referencing format is required including in-text referencing and a reference list.  concise descriptions and correctness of answers  supported content with any diagrams, figures where applicable  demonstrations of using your initiative and supporting your answers with interesting references to contemporary issues from newspapers, journals, professional publications, web resources i.e. extracts from podcasts, financial institutional websites etc. Page 2 of 12 Where calculations are required, marks will be awarded for:  the accuracy in the calculations and showing the right formulae to be used,  the steps shown in arriving at the answers, the correct answers and any diagrams/timeline as required. NB Correct answers alone [i.e. without supporting evidence] will give you 50% of the total possible mark. Section 2: Submission Details and Issues that will Impact on Your Mark. Submission Details This online submission MUST BE submitted as a word document. PDF submissions will not be accepted. Issues that will impact on your marks include: 1. Where copying from other sources results in high % similarity, marks will be deducted as shown on the mark-sheet. Therefore, proper use of in-text referencing is important. Avoid direct quotes. Turnitin will be used to check % similarity. Do not copy the questions from the textbook as this will increase your % similarity. Under extreme circumstances where high % similarity indicates copying from written works of other students in CQU, other universities or any other institutions world-wide, the assignment will be reviewed by the academic misconduct board. If percentage similarity exceeds 20%, marks will be deducted based on a progressive scale as determined by the course co-ordinator. 2. Each question is marked out of 100 and overall mark will be scaled down to 10% of total assessment grade. Penalty for late submission is 5% per calendar day including Saturday and Sunday. Page 3 of 12 Section 3: Questions [Each question is worth 10 Marks and 30% of total grade]. 1 Demonstrate your understanding of classical and modern, domestic and global operations of money and capital markets by: 1. Explaining how the Global Financial Crisis [GFC] has had a significant impact on 1) the stability and interconnectedness of international financial markets and economies and 2) the regulatory responses that have been implemented in an attempt to stabilise the financial system. 2. While Commercial Banking was not the only sector to be affected by the GFC, clearly business continuity was threatened and many were exposed to the very real risk of failure. Business continuity risk management may be said to incorporate a disaster recovery planning process and a disaster recovery response process. a) Define business continuity risk management. b) Identify and briefly explain the core components of a disaster recovery planning process. c) Identify and briefly explain the core components of a disaster recovery response process. [Source: Chapter 1 Q. 15 (b) Chapter 2 Q. 15 (a), (b) and (c)]. Learning Outcome: 1 and 3 2 Bottom-up analysis approach focuses on the analysis of accounting ratios and other performance measures. Discuss this approach from two perspectives. 1. Evans and Partners is an investment advisory firm that provides specialist investment advice to its private clients. As part of the investment decision process, the senior investment analysts at the firm apply the bottom-up approach to the fundamental analysis of share prices. a) Explain why Evans and Partners would use this type of analysis. b) Identify and discuss six different accounting ratios that should be included in a bottom-up approach model. c) Identify and discuss three other performance measures that may be used. 2. An investor is evaluating the use of the bottom-up and the top-down approaches to fundamental analysis. The investor wants to use the approach that will best enable the structuring of a diversified share portfolio that will achieve specified income returns and capital gains. a) Compare both approaches and propose a recommendation as to which approach the investor adopt – top-down or bottom-up or both? Provide sound reasoning for your argument. b) The top-down approach includes an analysis of the local economy in which a company is situated, plus the economies of major trading partner countries and the global economy more generally. Why would an investor be interested in forecasting changes in these economies? [Sources: Chapter 7 Qs.1, 5 and 7]. Learning Outcome: 2 3 Listing on a stock exchange might be highly desirable for a company, but there are a number of requirements, conditions and costs associated with becoming a publicly listed corporation. For example, Freelancer Ltd is one of the newest public companies to list on the Australian Securities Exchange. a) Provide a broad overview of Freelancer Ltd AND identify and discuss the rights, roles and responsibilities of Freelancer’s shareholders, board of directors and executive management now that it is a publicly listed company, including the specific requirements for Australian companies seeking general admission to the ASX and the ASX profit test and asset test requirements. b) Explain why these rules are in place and how they contribute to an efficient stock exchange, support the interests of listed entities, maintain investor protection and impact will these have on the liquidity management of the firm and firm value? c) Within the context of the ASX, explain why there is a requirement and need for continuous reporting. [Sources: Chapter 4 Qs. 2 (8 th Edition), 4 and 13 and Chapter 5 Q. 10 (a) and 15] Learning Outcome: 4 Page 4 of 12 Section 4: Mark Sheet and Marking Rubrics for Assignment 1 To be submitted together with your answer as the coversheet of this assignment Name:_________________________ Campus:__________ Student ID_________ Name:_________________________ Campus:__________ Student ID_________ Question Max Marks for Each Question Mark for Each Question 1 10 2 10 3 10 Total out of 30 Penalty @ 1.5 marks per calendar day if no approval for extension to submission deadline Penalty for high % similarities Up to 20% deducted Total after applying Penalties Students to note: By completing your names on this Mark Sheet you are acknowledging