Will jason have to pay mortgage insurance in five years

Assignment Help Financial Management
Reference no: EM131807797 , Length: word count:1200

Fundamentals of Finance Group Assignment

Learning Outcome Details -

  • Describe, analyse and apply key financial concepts, including the importance and functions of finance in business organization; time value of money; Australian monetary system; risk-return measurement and tradeoff in terms of individual asset and portfolio; Australian financial system, as well as global financial markets.
  • Utilize tools and technology, such as basic algebra, Microsoft Office software and internet resources, to collect, evaluate and organize financial information.
  • Conduct academic and practical analysis on real-world financial issues and supply feasible solutions based on processed information.

Assignment Questions -

Suppose today is 10 July 2017. After completing a Bachelor of Science (Honours) in Beacon University, Jason accepted an offer from a domestic investment bank in April 2017 and has been working as a financial modelling analyst in the quantitative research desk since 1 July 2017. Although specialized in computer programming, Jason has limited knowledge about finance. Recently, Jason has a few queries about the financial matters and asks for advice from you, a junior equity analyst.

Question 1: Time Value of Money

At the moment, Jason is sharing accommodation with friends. Because the Australian housing market has experienced exuberant growth in recent years, Jason decides to buy his first residential property in 5 years (July 2022). Currently, the median price of a 2-bedroom unit in his desired suburb is $550,000. Historical data suggest the median unit price in the same suburb has grown by, on average, 3.39% per annum since 2008. Jason believes this growth rate will continue for the next five years.  Jason has accumulated $30,000 (as of 30 June 2017) in his saving account which pays 2.4% p.a. interest, compounded quarterly. Jason plans to deposit $7,500 into this saving account at the end of each quarter, starting from 30 September 2017. On 30 June 2022, Jason will use the outstanding balance of this account as the down payment.

The same bank offers fixed-rate 25-year mortgage loan and requires monthly instalment. If the amount of mortgage loan is more than 80% of the property value, mortgagees have to purchase insurance, a one-off payment of $5,000. Mortgagees are allowed to curtail their loan duration by lodging additional monthly repayment. Jason expects mortgage rate to reach 7.2% p.a. in 2022. His first instalment will be paid at the end of July 2022. Jason's property purchase in five years should be eligible for stamp duty exemption. Other transaction costs, such as conveyancing service and bank fees, is estimated to be $2,000 in five years.

For simplicity, the median unit price and mortgage loan amount in five years are rounded UP to the nearest thousand, that is, $342,194 is rounded to $343,000.

a. Will Jason have to pay mortgage insurance in 5 years?

b. How much is Jason's monthly mortgage instalment if he plans to pay off the mortgage in exactly 25 years?

c. After reviewing his monthly budget, Jason is confident that he can afford $4,600 monthly mortgage payment. How long, in terms of months, will Jason pay off the mortgage?

Question 2: Corporate Governance and Financial System

Jason's grandfather gave him some shares as gifts when he graduated. One of these shares is Commonwealth Bank of Australia (CBA.AX). Jason read some news headlines about CBA's recent scandal and come across phrases like 'corporate governance' and 'money laundering'. Compose a short essay to address the below issues (within the word limit).

a. Briefly explain CBA's recent scandal, including what happened, how the authority, CBA management and investors responded to the scandal, and etc.

b. What is 'corporate governance'? Do you think whether CBA's board of directors, CBA's senior management or both should be responsible for the incident?

c. What is 'money laundering'? How does money laundering affect financial system, especially the financial institutions? Are you aware of any other channels which facilitates money laundering without going through the current financial system?

Need help with Question 1 (a) and Question 2 in 1200 words.

Attachment:- Assignment Files.rar

Reference no: EM131807797

Questions Cloud

Claim that optimism regarding china direction depends on age : Set up the appropriate hypotheses to test the claim that optimism regarding China's direction depends on the age of the respondent.
How would you rate the ethical practices of the company : Briefly describe the issue. How would you rate the ethical practices of the company that you chose (excellent, fair or poor)? Explain
Year compounding annually : How long will it take for an investment to double at 4% per year compounding annually?
What is the total payment : The firm will make no payments until the loan is due, when it will pay off the interest and principal in one lump sum. What is the total payment?
Will jason have to pay mortgage insurance in five years : MAF101 - Fundamentals of Finance Group Assignment. Will Jason have to pay mortgage insurance in 5 years. What is 'corporate governance'
Analyze the actions of people and organizational leaders : Analyze the actions of people and organizational leaders directly and indirectly involved with the tragedy. Specifically address the ethical issues they faced.
How much do you have after 50 years : Assume that you save 1 penny a day for 50 years, that you deposit it in the bank at the end of each month, and that there are 30.5 days per month
Indicate that the interest rate received on a loan : At the 5% significance level, do the data indicate that the interest rate received on a loan is dependent on race? Provide the details.
Discuss pressures associated with ethical decision making : Discuss the pressures associated with ethical decision making at Farrows Bank. Your response should include introduction, thesis statement and clear discussion.

Reviews

len1807797

1/10/2018 6:45:48 AM

Need help with Question 1 (a) and Question 2 in 1200 words. Question: 1 (7 marks) - Answers the questions as asked in the assignment: (The text typed in Word but the mathematical steps shown by using proper Equation format only) (i) Show the step-by-step full workings/calculation and justification of whether Jason has to purchase insurance on mortgage (3 marks). For Question 2, students need to undertake comprehensive research using all available resources. Each group needs to cite at least 7 scholarly references (journal article, book, online/paper press articles and etc.) as evidence of their research. Failing to reach this minimum requirement will lead to mark deduction.

len1807797

1/10/2018 6:45:42 AM

Question: 2 (6 marks) Answers the questions as asked in the assignment: ((The text typed in Word, may include Graphs, Charts, Diagrams or similar things) Marking is based on the width and depth of research, which should be based on at least 7 scholarly articles. Followed superior/standard /average/below-average writing style and referencing format. Harvard style referencing should be used and there should be no reference from either Wikipedia or Investopedia. (1 mark) (i) Briefly explain CBA’s recent scandal and response from relevant stakeholders. (1 mark) (ii) Explain what corporate governance is, the role of CBA’s senior management and board of directors in the incident, and what kind of responsibility they should take. (2 marks) (iii) Explain what money laundering is, how it influences the financial system, especially financial institutions, and name some exotic measures to conduct money laundering without using the current financial system. (2 marks).

len1807797

1/10/2018 6:45:36 AM

Demonstrated superior /standard /average /below-average performance in terms of calculations, analysis and presentation. Presents exemplary awareness about the discipline specific knowledge. Shows extraordinary competence in applying discipline knowledge in all relevant areas. Synthesises in-depth information and knowledge from a broad range of relevant sources representing various points of view, approaches or cultural contexts, demonstrating depth in a wide range of areas. Organises and synthesises evidence to reveal insightful patterns, differences or similarities.

len1807797

1/10/2018 6:45:26 AM

Proposes exemplary solutions that indicates a deep comprehension of the problem and reflects a consistently high level of judgement of the pros and cons of various solutions and factors impacting on decision making within a professional context. Solutions are extremely sensitive to a diversity of contextual factors as well as all of the ethical, logical and cultural dimensions of the problem. Solutions reflect a exceedingly high level of intellectual independence. Consistently uses commonly available and new technologies selectively and appropriately, effectively and efficiently to present a very clear, coherent and independent exposition of knowledge and ideas and solutions to unpredictable and complex problems. Perfect assignment format and proper use of Harvard style of referencing.

len1807797

1/10/2018 6:45:21 AM

Assignment format and presentation (1 marks) Followed the instructions provided, used all the table format given. Overall presentation of the assignment was superior /standard /average /below-average No handwritten text or equation or any other form of writing are acceptable. The entire assignment has to be typed in Word. All equations should be typed applying the Equation and Symbol function. Text format equation should be avoided at any time.

len1807797

1/10/2018 6:45:15 AM

Submission Instructions - You must keep a backup copy of every assignment you submit, until the marked assignment has been returned to you. In the unlikely event that one of your assignments is misplaced, you will need to submit your backup copy. When you are required to submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment dropbox folder after upload, and check for, and keep, the email receipt for the submission. Only electronic submission via CloudDeakin Assignment Dropbox is accepted. Hardcopy submission or email attachment directly to Unit Chair is NOT accepted. Extension of assignment submission has to be applied in writing and approved by Unit Chair.

len1807797

1/10/2018 6:45:08 AM

Conditions under which an extension will be approved include: Medical conditions of a serious nature, e.g. hospitalization, serious injury or chronic illness. Note: Temporary minor ailments such as headaches, colds and minor gastric upsets are not serious medical conditions and are unlikely to be accepted. However, serious cases of these, with medical certificate, may be considered. Compassionate e.g. death of close family member, family breakdown. Hardship/Trauma e.g. sudden loss or gain of employment, severe disruption to domestic arrangements, victim of crime. Note: late group formation will not be accepted as grounds for extension.

len1807797

1/10/2018 6:45:03 AM

Notes - Penalties for late submission: The following marking penalties will apply if you submit an assessment task after the due date without an approved extension: 5% will be deducted from available marks for each day up to five days, and work that is submitted more than five days after the due date will not be marked. You will receive 0% for the task. 'Day' means working day for paper submissions and calendar day for electronic submissions. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date. For more information about academic misconduct, special consideration, extensions, and assessment feedback, please refer to the document Your rights and responsibilities as a student in this Unit in the first folder next to the Unit Guide of the Resources area in the CloudDeakin unit site.

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd