MU - S2 2000 - Personal Financial Planning

MU - S2 2000 - Personal Financial Planning - MONASH...

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Unformatted text preview: MONASH UNIVERSITY LIBRARY III II lllHH ll 00409259 an as - I Monash University Semester Two Examinations 2000 Faculty of Business and Economics Department of Accounting and Finance EXAM CODES: AFF3111 TITLE OF PAPER: PERSONAL FINANCIAL PLANNING EXAM DURATION: 3 Hours READING TIME: 10 Minutes THIS PAPER IS FOR STUDENTS STUDYING AT: (oflice use (Jan — tick where applicable) a El Clayton [21 Gippsland D Peninsula El Distance Education CI Enhancement Studies El Other (specify) El Berwick E] Open Learning III Caulfield Ei Sunway Candidates are reminded that they should have no material on their desks unless their use has been specifically permitted by the following instructions. ' AUTHORISED MATERIALS CALCULATORS ‘ YES El N0 El OPEN BOOK YES I: N0 I2! SPECIFICALLY PERMITTED ITEMS YES I: ' NO El if yes, items permitted are: This paper consists of Seyen (7) questions printed on Four (4) pages. PLEASE CHECK BEFORE COMMENCING. This is a FINAL paper. The total number of marks available in the examination is 70. 00849le.doc Page 1 of 4 OFFICE USE ONLY AF F31 ll PERSONAL FINANCIAL PLANNING Answer the following questions in the answer booklet provided by writing the Question Number, the . part (a-j) and the nominated answer, Select the response that you feel best answers the question asked. I. : “A Question One I - (a) If the Australian Government increases the level of its purchases of securities to the public this will have the effect of: (i) decreasing interest rates _ (ii) increasing the level of savings in the community (iii) causing interest rates to increase (iv) have no impact on interest rates or savings (b) The price/earnings ratio for a company measures: (i) the annual earnings per share for the company (ii) the ability of the company to pay dividends (iii) the level of profitability for the company (iv) the relative purchase price for the company share (0) The sector of the economy that is normally a net borrower is: ' ' -’ (i) 7 the household sector (ii) the overseas sector (iii) the business sector (iv) the government sector (d) Unavoidable losses of low incidence and high cost can best be'handled by: (i) risk control (ii) risk avoidance (iii) risk transfer (iv) risk retention (e) A small investor in property may consider purchase of units in a managed fund to: (i) lower the level of risk in their portfolio (ii) increase the level of tax deductible charges (iii) achieve a lower, more secure return (iv) access a more diversified range of properties ‘ {i K (i) Assessable Income is: _ n” (i) total income earned for the period (ii) taxable income less allowable deductions (iii) income on which tax will be levied for the period (iv) taxable income less rebates 00849le.doc Page 2 of 4 OFFICE USE ONLY AFF3111 PERSONAL FINANCIAL PLANNING (g) A retired couple give $15,000 to their children in the 1999/2000 year. For the purpose of the Assets Test, what sum will be assessable? (i) $5,000 (ii) $7,500 (iii) $10,000 (iv) $15,000 (h) In drafting a will, which assets cannot be distributed by the client? (i) money held in a superannuation fund (ii) a term life policy for the benefit of the client’s spouse v (iii) the family home held under a joint tenancy agreement (iv) all of the above (i) Which of the following is incorrect? (i) a marriage revokes a will . (ii) a beneficiary may also be an executor ‘ (iii) a beneficiary may witness a will and also retain his/her entitlement under the will (iv) a will can be drawn by anyoneand does not have to be on a special form (i) Which of the following does not constitute a principal step in constructing a financial plan? (i) selecting an advisor (ii) gathering data (iii) setting goals _ . (iv) preparing recommendations ' (10x1=10marks) Question Two (a) Explain why a financial planner needs to understand the impact of business cycles on the Australian economy. ' (b) List four indicators of the statelof the economy and explain whether they are co-incident, leading or lagging indicators. (6 + 6 =12 marks) Question Three Explain why an investor needs to diversify their investments within their portfolio, and suggest four ways in which this diversification may be achieved. - 00849le.doc (12 marks) Page 3 of 4 OFFICE USE ONLY E AFF31 1 1 PERSONAL FINANCIAL PLANNING Question Four (a) A taxpayer has contributed $2,000 to superannuation for a non-employed spouse. Calculate the amount that the taxpayer may claim as a rebate for the contribution. (b) You have received a $525 dividend on a fiilly franked share. Calculate the tax impact of the dividend if your marginal tax rate is 35% and the company rate is 30%. (Ignore the Medicare levy.) ' (c) If the full single pension is $386.90 per fortnight, calculate the entitlement amount for a pensioner who has $6,500 in a cash management fund earning 4.5%, and $75,250 in a managed balanced fund earning 9.5% per annum. I (3 X 3 = 9 marks) Question Five There are a number of steps involved in preparing a financial plan for a client. List and briefly describe each of these steps. (15 marks) Question Six Section 851 of the corporations’ law describes “reasonable basis for recommendation”. Briefly explain how this section of the law relates to financial planning. (8 marks) Question Seven (a) (b) What are the main tasks a Will seeks to achieve? List the essential basic requirements of a valid Will. . (2 x 2 = 4 marks) 00849le.doc Page 4 of 4 I " rc'. “‘x/v‘ ...
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MU - S2 2000 - Personal Financial Planning - MONASH...

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