ACFI3006期中考2022S2

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The University of Newcastle *

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3006

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Economics

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Jan 9, 2024

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Question 1 1 pts The relationship between nominal rates and real rates of return in times of rising inflationary levels results in: Group of answer choices Real rates exceeding nominal rates of return. Nominal rates exceeding real rates of return. Both nominal and real rates of return being equal. Real rates being positively related to inflationary levels. Flag question: Question 2 Question 2 1 pts An inverse yield curve will typically comprise the following: Group of answer choices Long-term interest rates will be higher than short-term interest rates Short-term interest rates will be higher than medium-term interest rates Medium-term interest rates will be higher than long-term interest rates Short-term interest rates will be the same as medium-term interest rates Flag question: Question 3 Question 3 1 pts Assume John has a $393,000 mortgage home loan, a $7,000 credit card, a house worth $750,000 and a car and other personal assets worth $95,000. John has an annual after-tax income of $110,000 and an annual net cash surplus of $9,000. He pays $28,000 annually in debt repayments for the home loan and credit card and has $8,000 in his bank account. Calculate John’s Liquidity ratio. Group of answer choices 28.57% 25.45% 55.56% 53.74% Flag question: Question 4 Question 4 1 pts Acting in the best interests of the client is required of the financial planner by the:

Group of answer choices Corporations Act for all financial product recommendations to clients over a minimum value of $50,000. Financial Planning Act for all financial advice recommendations to clients over a minimum value of $25,000. Financial Planning Association for all financial advice recommendations to clients where practical to do so. Corporations Act for all financial advice recommendations to retail clients.none of the above. Flag question: Question 5 Question 5 1 pts The importance of the efficient frontier lies in the fact that it: Group of answer choices Identifies where the most efficient portfolios are. Points to the most efficient portfolio in a series of data in the trade-off curve Represents the optimal mix of return and risk for a portfolio of investments given a required level of risk. Is a curve which shows how diversification eliminates a portfolio’s risk Flag question: Question 6 Question 6 1 pts An ordinary annuity is characterised by: Group of answer choices A series of cash flows that are identical in amount and occur at the end of consecutive time periods. A series of cash flows that are identical in amount and occur at the start of consecutive time periods . A single cash flow that occurs at the end of a particular time period and is accumulated over multiple time periods. None of the above. Flag question: Question 7 Question 7 1 pts

An investment offers a single future value of $20,000 in one year’s time. The expected market return is 14% p.a. The risk-free rate is 3% p.a. The investment’s beta is 1.2. According to the CAPM, what rate of return do you expect from the investment? Group of answer choices 16.2% 17.2% 15.2% 14.0% Flag question: Question 8 Question 8 1 pts A recommendation by a financial advisor for a client to change their investment portfolio from one with a low-risk profile to one with a high-risk profile is: Group of answer choices Not possible under any circumstances Possible where appropriate to the client’s specific circumstances Illegal pursuant to the Corporations Act Only possible when the return is guaranteed by the financial adviser. Flag question: Question 9 Question 9 1 pts Which of the following best describes the Product Disclosure Statement: Group of answer choices The means of conveying advice to a person seeking financial advice Information provided about the service provider that should be given to retail clients when it appears likely that financial services will occur Information about a particular financial product. None of the above Flag question: Question 10 Question 10 1 pts ABC Ltd has on issue a debenture with a face value of $1 million, and a fixed interest coupon equal to 5% p.a.. The current yield is 4.25% p.a. Coupons are paid half-yearly and the debentures will mature in 5 years. As an investor, how much would you need to pay to acquire the debenture? Group of answer choices

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An amount less than the coupon value of the debentures An amount equal to the face value of the debentures An amount greater than the face value of the debentures An amount less than the face value of the debentures Flag question: Question 11 Question 11 1 pts Assume John has a $393,000 mortgage home loan, a $7,000 credit card, a house worth $750,000 and a car and other personal assets worth $85,000. John has an annual after-tax income of $110,000. He pays $28,000 annually in debt repayments for the home loan and credit card and has $8,000 in his bank account. Calculate John’s net worth ratio Group of answer choices 52.55% 52.11% 28.57% 42.46% Flag question: Question 12 Question 12 1 pts A Statement of Advice must: Group of answer choices Assess the complexity of the advice provided Incorporate the level of the client’s financial literacy in its presentation Tailor advice to the needs of the client All the above Flag question: Question 13 Question 13 1 pts If Jeff (an Australian resident for tax purposes) earns a salary of $86,000 and has no other income or deductions, calculate the net income tax payable for the financial year ending 30 June 2022 including Medicare Levy, Low Income Tax Offset and Low-Mid Income Tax Offset (where applicable).

Group of answer choices $18,417 $20,137 $18,637 $17,537 Flag question: Question 14 Question 14 1 pts Which of the following is an integral part of preparing a financial plan? Group of answer choices Analysing data and identifying issues Defining or establishing goals and objectives Gathering client information All of the above Flag question: Question 15 Question 15 1 pts When is a statement of advice (SOA) required for a retail client? Group of answer choices A financial planner must provide the client with a statement of advice SOA within 21 days after the advice is provided. A financial planner is not under an obligation to provide written advice to the client. A financial planner must provide the client with a SOA at the same time as, or as soon as practicable after, the advice is provided. None of the above. Flag question: Question 16 Question 16 1 pts

If Sam invests $200 at the end of each month for 4 years, and interest is 6% per annum payable monthly, what will the accumulated balance be in Sam’s account at the end of 4 years (to the nearest dollar)? Group of answer choices $6,574 $9,600 $10,820 $10,176 Flag question: Question 17 Question 17 1 pts Armed expects to retire in 20 years’ time and hopes to have saved approximately $1 million by that time. To the nearest dollar and assuming 2.5% inflation p.a., approximately how much will that $1 million be worth when expressed in real dollars (i.e. today’s purchasing power dollars) ? Group of answer choices $854,525 $953,485 $440,396 $610,271 Flag question: Question 18 Question 18 1 pts Acting in the best interests of the client is required of the financial planner by the: Group of answer choices Corporations Act for all financial product recommendations to clients over a minimum value of $25,000. Financial Planning Act for all financial advice recommendations to clients over a minimum value of $25,000. Financial Planning Association for all financial advice recommendations to clients where practical to do so.

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none of the above. Flag question: Question 19 Question 19 1 pts If John invested $12,000 into a term deposit, paying simple interest of 5% per annum, what would the accumulated interest be after 8 months (to the nearest dollar)? Group of answer choices $400 $12,400 $12,600 $600 Flag question: Question 20 Question 20 1 pts Why would you borrow to invest and be happy with a tax loss? Group of answer choices You may be able to reduce your annual income tax obligation. The tax saving may offset much or all of the cash loss in a period. You may be expecting a significant capital gain (after tax) in the long run. All of the above Flag question: Question 21 Question 21 1 pts Which of the following is relevant for financial risk tolerance and the ability to withstand possible shocks to your wealth: Group of answer choices Liquidity, consumption needs and one’s investment horizon Discomfort regarding possible uncertainty of future investment values Current level of wealth All the above Flag question: Question 22

Question 22 1 pts Your client requests your assistance to generate an income stream of $60,000 p.a. for 20 years (taken at the end of each year) to help provide for their retirement. Assume a nominal rate of return of 6% p.a. on the investment portfolio, an inflation rate of 3.5% p.a., what is the real rate of return expected from the investment portfolio? Group of answer choices 9.50% p.a. 2.42% p.a. 3.41% p.a. None of the above Flag question: Question 23 Question 23 1 pts One of the roles of ASIC is to: Group of answer choices Draft legislation governing the financial planning industry Monitor competition policy within the financial services sector Ensure compliance by practitioners with legal requirements governing the financial planning industry Monitors compliance with Tax legislation Flag question: Question 24 Question 24 1 pts Which of the following statements is correct with respect to Capital Gains Tax (CGT)? Group of answer choices CGT has applied since the introduction of income tax legislation. Capital losses can only offset capital gains, not other taxable income. CGT applies to winnings on sporting bets For assets purchased after September 1999, the indexation method is used to calculated CGT. Flag question: Question 25 Question 25 1 pts

The effect of a change in the general level of interest rates on the capital values of traded fixed-interest securities is such that: Group of answer choices A fall in the general level of interest rates will normally promote decreases in the capital values of traded fixed-interest securities. Holders of these securities will enjoy an appreciation in capital values when the general level of interest rates falls. There is a positive relationship between the general level of interest rates and the capital values of traded fixed-interest securities. Both a and c. Flag question: Question 26 Question 26 1 pts Which of the following statements is incorrect? Group of answer choices Taxation typically increases your wealth Financial planning involves accumulating/protecting/consuming wealth Tax management strategies are important in any financial planning decision A new SOA is required where there has been a significant change in client circumstances Flag question: Question 27 Question 27 1 pts If the nominal interest rate is 4% compounded monthly, the effective interest rate per annum is (to 2 decimal places): Group of answer choices 0.33% 4.17% *4.07% 4.88% Flag question: Question 28 Question 28 1 pts A property is currently leased to a related party for net return of $25,480 per annum, which is 10% less than market rates. Assuming a market cap rate of 5%, to the nearest dollar, what is the theoretical market value of a property? Group of answer choices

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$509,522 $560,560 $560,610 $566,222 Flag question: Question 29 Question 29 1 pts If Jimmy (an Australian resident) receives a fully franked (100%) dividend of $7,000 in his bank account , how much is the imputation credit? (Assume a company tax rate of 30%) Group of answer choices $7,000 $3,000 $2,100 $3,500 Flag question: Question 30 Question 30 1 pts Cash investments aim to provide: Group of answer choices A capital guarantee. Income, liquidity and stable returns Returns that fully offset the investor from the impacts of inflation. High returns over the longer term.

ACFI3006期中考2022S2

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