AFF3111 2005 Sem 2 Solutions

AFF3111 2005 Sem 2 Solutions - AFF3111 PERSONAL FINANCIAL...

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AFF3111 PERSONAL FINANCIAL PLANNING SUGGESTED SOLUTIONS Semester 2, 2005 Question One (10 marks) (a) (iii) (b) (ii) or (iv) (c) (iii) (d) (iv) (e) (iii) (f) (i) (g) (iv) (h) (iv) (i) (iv) (j) (ii) (1 each = 10 marks) Question Two (10 marks) A managed investment is a vehicle in which funds are pooled and a portfolio of assets is purchased with the funds; each investor (unit holder) has a beneficial “prescribed” interest according to the proportion of their investment to the total pool. (3 marks) People who are likely to invest in MIs include those who: 1. have small amounts of money to invest; 2. require a simple way of achieving diversification; 3. have little time to spend in determining their investments; 4. have no interest in determining their investments, or learning such skills; 5. are prepared to pay for the skill and experience of a professional fund manager, who will also simplify the paperwork. (3 marks) The fours Ps – people, (investment) process, portfolio, and performance (elaborate). (4 marks) Question Three (10 marks) Firstly, the financial planner needs to explain the advantages and disadvantages of fixed-interest securities. However, s/he should also explain the attributes of the other asset classes, so that the client is aware of other alternatives, in particular the benefits o f d
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This note was uploaded on 07/19/2011 for the course BUS 3111 at Monash.

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AFF3111 2005 Sem 2 Solutions - AFF3111 PERSONAL FINANCIAL...

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