FSC521 - The Financial Services Industry - Accounting and Finance Assignment Help

Assignment Task

Learning outcomes  
This assignment assesses the following learning outcomes: 
• Describe financial markets and systems, including the specific roles of key market  participants.  
• Analyse how key factors in the economic environment impact participants in the  financial services sector. 
Instructions  
• Submit all your answers in one document. 
• Write the number of each part of the question you are answering.  • Create a header with your name, student number and assignment number, and  number your pages. 
• This assignment contains four tasks covering four different hypothetical  financial advice situations. 
• You must complete all four tasks. 
Tasks Topic 
1 Financial institutions and the tax system 
2 The impact of natural disasters and change in the OCR 
3 Financial markets and the impact of the business cycle 
4 Regulators 
• You will be assessed on your overall presentation. For tasks 1–3, present  each answer as if you were providing a written response to the client. For  task 4, your answer should be in a format that is appropriate for an article  in an online magazine. 
Continued next page 
• Each answer should be presented in a professional manner. This means: o each answer should be free of spelling and grammatical errors 
o written in a way that will be understood by a diverse audience, some of  whom may have little financial knowledge. 
• For each task, we have provided a suggested word count. Note that the word  count is for guidance only and you will not be penalised for being under or  over the suggested word count, as long as you fully complete the task. 
• If you use sources to support an argument, make sure you  
acknowledge them with references in your discussion and a  
References list at the end of your assignment. 
• Keep a copy of your assignment. 
Submission  
Submit your work through the online assessment submission link. Upload your  assessment, then use the Save and Submit assessment buttons. You will get an  electronic receipt and your work is then logged and tracked through our system.  Assessments emailed directly to lecturers will not be accepted. 
Referencing and plagiarism  
Refer to Referencing and avoiding plagiarism for information on APA referencing and  avoiding plagiarism.  
Task 1: Financial institutions and the tax system  
Sanjay currently earns $95,000 per annum and his total income has exceeded $90,000  for the past two years. He has inherited $50,000 and wants to place the money on term  deposit for 12 months. He’s asked you for advice on the range of financial institutions  that offer this product. 
a) To illustrate the range of providers for Sanjay: 
• Select three different types of financial institution currently operating in the  New Zealand financial services industry that Sanjay can place his money on  term deposit with. 
• For each financial institution, state their name and type of financial institution,  and provide a link to the page promoting term deposits. 
• Discuss the similarities and differences between the three financial  institutions you selected in terms of: 
o Their structure/ownership 
o How they’re regulated 
o The services they provide. 
b) You explain to Sanjay that with some providers, he has the option of placing his  $50,000 on a term deposit or in a PIE Term Deposit Fund for 12 months. Both  products currently offer interest at 4% per annum and there are no fees payable for  either option. 
Assume Sanjay invests for the next 12 months, and that his salary remains at  $95,000. Also assume his income is derived only from his salary and this  investment. Calculate his total after-tax income (salary + interest) for each  investment option and clearly highlight which option provides him with the higher  after-tax income. Show all your workings.
Task 2: The impact of natural disasters and changes in the OCR  
Aroha runs a small business exporting cut flowers and foliage. A year ago, you helped  Aroha purchase her first home using a revolving credit facility. The current balance  outstanding on this facility is $451,250. She has sum insured home insurance cover  with Aotearoa Insurance. 
Aotearoa Insurance has a reinsurance treaty with Swiss Re.  
Aroha has seen the following two newspaper headlines: 
• Headline 1: ‘Inflation is rising and is expected to reach 5–6% in the next eighteen months’ 
• Headline 2: ‘Hurricane Fred in the United States and the earthquake in Japan set  to impact homeowners. 
She seeks advice from you on how these factors will affect both her business  and her personal financial situation. 
a) Headline 1: Analyse the impact of rising inflation on Aroha. 
You are required to: 
• Predict the action the Reserve Bank of New Zealand will take in  response to rising inflation. 
• Analyse how and why the Reserve Bank of New Zealand’s action will  impact Aroha’s personal financial situation in terms of her home loan. 
• Analyse how and why the Reserve Bank of New Zealand’s action will impact  Aroha’s business in terms of its export earnings. 
b) Headline 2: Analyse how and why these overseas disasters will impact Swiss  Re, Aotearoa Insurance and Aroha, as the insured under a home insurance  policy. 
Task 3 Financial markets and the impact of the business cycle  
Last year you helped Eliana choose the right KiwiSaver fund. She knew little about  financial markets and you provided her with some background information on managed funds to help her make a decision about which fund to select. She chose the  Aotearoa Investments Balanced KiwiSaver Scheme. 
Last week she received the latest Aotearoa Investments Balanced KiwiSaver Scheme  fund update. This has prompted her to ask you to help deepen her understanding about  where her KiwiSaver funds are 
invested. You decide to use Aotearoa Investments’ top 10 investments to illustrate the  main markets her funds are invested in. 

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