Assessment 2 – Scenario
Instructions to the candidate: You are required to complete all activities and
answer all questions satisfactorily to achieve a satisfactory rating. Include your
answers to the questions along with any documents you are asked to provide/
produce in your portfolio.
Please refer to the competency standards in the back of this assessment booklet
when completing this assessment task. Please attach a separate word processed
document with your answers to the questions.
Please read the scenarios below and answer the questions or complete the
activities that follow. Should you have any questions please do not hesitate to
contact your trainer.
Financial Modelling
Scenario 1:
You work for Australian Super, one of Australia’s largest super funds. This
Superannuation Fund is committed to passing on all the good things that size
has to offer. The vision of this organisation is: “every Australian should have
a solid financial future, so our purpose is to help achieve better retirement
outcomes for all”.
Australian Super is committed to providing quality service by employing
managers and specialist staff in-house, and complements their expertise with
external service providers.
Your manager has asked you to prepare a comprehensive financial model for
the purpose of determining where $100 million dollars will be invested. The
Strategic Plan for Australian Super over the next 3 years is to achieve 10%
return on investment.
Your task is to choose 2 ASX listed companies from the list below. Using
Microsoft Excel prepare a financial model to determine the value and ongoing
viability of both companies for a period of 3 years. Make your recommendations
as to your preferred organisation and explain your reasons.
1. Develop an asset pricing model to determine the required or expected rate of
return on the asset (8 marks)
2. Determine the value in relation to the capital structure of both companies.
(8 marks)
3. Determine if the theoretically appropriate rate of return will be 10% over the
5 years period from the purchase of shares in the organisation. (5 marks)
4. The model should take into account the asset’s sensitivity to non-diversifiable
risk, as well as the expected return of the market and the expected return of
a theoretical risk-free asset. (5 marks)
5. Detailed market analysis and other information to support projected
numbers (8 marks)
6. Consider how the economic and political climate might relate to the financial
industry when undertaking financial modelling. (6 marks)
ASX Listed companies include:
• Woolworths Ltd
• Toll Holdings
• Qantas Airways
• Lend Lease Group
• Goodman Group
Assessment 2 total: 40 marks