Reference no: EM131480886

Develop your knowledge and skills on contemporary issues about the Australian and global financial systems.

This assignment is a group assignment to be completed in group of 2 students for on-campus students. Distant learning students (FLEX) also have the option to collaborate this assignment in group of 2, though this may pose difficulty. Therefore, distant learning students can submit their assignments individually. By week 2, the list of case studies, short essay and practical questions, together with the marking guidelines, will be provided in the Moodle site. All assignments are to be submitted online in Moodle site as a word document and not in PDF form. For students working as a group, only one member is to submit the assignment with the marksheet on the first page, listing all the members of the group. Working in group is to promote collaborative learning and knowledge sharing to enhance the learning experience. This assignment is worth 30% of the total mark for this course.

Reference style : APA (Please use A rated peer reviewed journals) Minimum 20 references required

This section can be expanded to view the assessed learning outcomes

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 application 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

Section 1: Overview

Distant learning (FLEX) studentscan 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 marksheetof 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 requiresstudents to provide comprehensive answers / solutions to the 3 Questions below. The questions have been sourced from the prescribed textbook (8th edition and/ or 7th 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

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 initiativeand 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.
 
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.

Questions

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.

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?

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 andneed for continuous reporting.