AFAS300 Principles of Financial Literacy
Individual Assignment – Semester 3 -2015
Due to be submitted no later than 5PM Monday 25 January 2016
NO late assignments will be accepted, therefore students who fail to submit their
assignment by the above due date will be awarded a zero mark (NO EXCEPTIONS)
The assignment needs to be submitted online by the above date in a soft copy format via the Turnitin link placed on the ilearn course website.
This assignment will comprise a total of 20% of the marks allocated for this Course.
Important Notes:
• The assignment must be typed (font 12, Arial or Times New Roman)
• Attempt ALL questions
• Where appropriate, the use of tables, graphs, flowcharts, etc. is encouraged to help illustrate your point clearly
• Show workings and calculations where applicable
• Marks will be awarded for the presentation of your work
• Assumptions need to be reasonable and logical and cannot conflict with the facts in the question/s and must be clearly stated
• Always explain and justify your answer/s /recommendation/s
• You are expected to do some research and refer to material from outside the prescribed textbook to complete this assignment
• Clearly state your source reference/s
• Total maximum word limit is 3,000 words
• Plagiarism by any student/s will render the student/s involved a zero mark and possible further actions by the University

Case study – Couples information
Couple 1 Couple 2 Couple 3
Profile Wealth Accumulators Pre- Retirees Retiree
Names James & Tammy Spyros & Danielle Tim & Jane
Ages James: 28, Tammy: 27 Spyros:53, Danielle: 50 Tim 66, Jane: 63
Marital Status Recently married Married (2 children Married (2 children and ages 21 & 15) 2 grandchildren ages 2&4)
Dependents 0 1 0
Occupation James: Pilot Spyros: Accountant Tim: Retired
Tammy: Lawyer Danielle: Teacher Jane: Retired
Household $130,000 $240,000 $110,000 (Pension and
Income (after investment income) tax)
Living $120,000 $140,000 (including $80,000
Expenses mortgage)
Assets (Total Home : Renting Home: $1.5 Million Home $2.2 Million
assets owned
by the couple) Superannuation Superannuation Superannuation Pension
$100,000 (3 accounts $600,000 $900,000 for James and 2 for
Tammy) Cash at call: $25,000 Cash at call: $40,000
Cash at call: $12,000 Term deposit: $55,000 Term deposit: $250,000
(matures 5 Jan 2016) (matures 18 Jan 2016)
Term deposit: $30,000
(matures 12 Jan 2016). Share & managed Shares & managed funds
funds $200,000 $350,000
Car: $100,000
Cars: $120,000 Car: $80,000
Liabilities Credit cards $12,000 Home Loan $225,000 Nil
Personal loan:$18,000
Car Loan:100,000
Risk profile High Growth Growth Balanced
Goals & Paying off debt, objectives saving a deposit to buy a house and
going on a skiing
holiday to the USA
Paying off a home loan, saving , paying for private school fees and saving for retirement Comfortable retirement, going on a European holiday in the next 12 months and starting a sinking fund for their grandchildren
Assignment Questions (Total 100 marks)
IN YOUR OWN WORDS You need to prepare a report to answer the question below related to the 3 couples above. Your report needs to explain and discuss issues asked in the question below relating to the 3 couples’ specific circumstances.
1. Describe why budgeting and financial planning is important element in assisting the 3 couples achieving their goals and objectives. You need to relate specifically to 3 couples’ specific goals and objectives. Provide clear examples where
applicable. (20 Marks)
2. What are the key features, advantages and disadvantages of the following investments? Comment specifically on the suitability of each of these investments to each of the couples above and provide comparison where appropriate. Explain and justify your answer.
a. Exchange Traded Funds (ETF) vs. mutual trust/managed funds
b. Australian shares/stocks vs. International shares/stocks
c. Government bonds vs. Corporate bonds
d. Gearing (borrowing to invest)
(40 Marks)
3. Explain why it’s important to consider insurance as part of risk management. List 2 general insurance and 2 personal insurance types/products and explain why they should be considered by any of the 3 couples above (you only need to list and explain 4 different products in total (i.e. not 4 for each of the couple)).
(10 Marks)
4. Explain why it’s important to consider superannuation as part of saving for retirement and retirement planning. List and explain 2 possible superannuation recommendations that should be considered by any of the 3 couples (you only need to list and explain 2 (i.e. not 4 for each of the couple)).
(10 Marks)
5. Explain why it’s important to consider having a valid will and an appropriate power of attorney as part of the couple’s estate planning highlighting the benefits and risks as applicable. In your answer relate specifically to each of the 3 couples individual circumstances.
Report Presentation (10 Marks)
Your report needs to be professionally presented and reader friendly. Ensure you address the points listed on page 1 of this assignment.
END OF ASSIGNMENT