Aff3111 Final Exam Paper

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Monash University
Semester One Examination 2008
Faculty of Business and Economics Department of Accounting and Finance EXAM CODES: TITLE OF PAPER: EXAM DURATION: READING TIME: AFF3111 FINANCIAL PLANNING ENVIRONMENT 3 hours 10 minutes

THIS PAPER IS FOR STUDENTS STUDYING AT: (office use only - tick where applicable) Berwick Caulfield Clayton Gippsland Peninsula Sunway Distance Education Enhancement Studies Open Learning Other (specify)

During an exam, you must not have in your possession, a book, notes, paper, calculator, pencil case, mobile phone or any other material/item which has not been authorised for the exam or specifically permitted as noted below. Any material or item on your desk, chair or person will be deemed to be in your possession. You are reminded that possession of unauthorised materials in an exam is a disciplinable offence under Monash Statute 4.1. AUTHORISED MATERIALS CALCULATORS YES NO

(Permitted calculators: Citizen SRT-135, Casio FX82MS scientific calculator, the Casio FX82AU scientific calculator, and Sharp EL-735 financial calculator, or calculators with an 'approved for use' Faculty label) OPEN BOOK SPECIFICALLY PERMITTED ITEMS if yes, items permitted are: YES YES NO NO

This paper consists of a compulsory question in Part A, six questions in Part B, and nine (9) pages of Rates and Tables printed on a total of fifteen (15) pages. Answer Question One from Part A and Any Five Questions from Part B. PLEASE CHECK THE PAPER BEFORE COMMENCING. THIS IS A FINAL PAPER.

STUDENT ID: …………………………...

DESK NUMBER: …………………….

THIS EXAMINATION PAPER MUST BE INSERTED INTO THE ANSWER BOOK AT THE COMPLETION OF THE PAPER. NO EXAMINATION PAPERS SHOULD BE REMOVED FROM THE EXAMINATION ROOM

AFF3111 Final Exam Semester 1 2008

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PART A QUESTION ONE IS COMPULSORY Question One (a) Briefly define the following: (i) (ii) (iii) (iv) (v) (vi) Financial Services Guide (FSG). Privacy Statement (PS). General advice. Personal advice. Unit trust. Trustee. (6 x 3 = 18 marks) (b) Discuss the four phases of the business cycle, including details on how they impact on the role of the financial adviser. (8 marks) What factors have led the Australian government to encourage self-funded retirement? Describe four actions that the government have taken to reduce reliance on social security payments. (10 marks) “Know your client: and “Know your product” are widely used phrases in financial services markets. What do the phrases mean, and why are they important? (12 marks) State the steps in the financial planning process. (12 marks) (18 + 8 + 10 + 12 + 12 = 60 marks)

(c)

(d)

(e)

AFF3111 Final Exam Semester 1 2008

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PART B
ANSWER ANY FIVE (5) QUESTIONS FROM THIS SECTION Question Two (a) Asset allocation is seen as an additional tool that can be used in the management of risk. Discus how asset allocation might support risk reduction. (6 marks) In 2008, Pham operates a small cleaning business. She disposes of a capital gains tax (CGT) asset that she has owned for two years (not an active asset of her business), and makes a capital gain of $17,000. She also has a capital loss in the same income year of $3,000 from the sale of another asset. What Pham’s net capital gain? (4 marks) What are the advantages and disadvantages of investing in a managed fund compared to direct investment? (10 marks)

(b)

(c)

Question Three (a) Briefly describe some of the investor services provided by managed funds. (6 marks) (b) What are the basic principles underlying the superannuation guarantee legislation. (6 marks) Describe the new style of account-based pensions that commenced on 1 July 2007. (8 marks)

(c)

Question Four (a)...
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