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Fundamentals of Finance (Doc)

   

Added on  2020-02-19

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Running head: FUNDAMENTALS OF FINANCEFundamentals of financeName of the Student:Name of the University:Author’s Note:Course ID:

FUNDAMENTALS OF FINANCE1Table of ContentsQuestion 1:.................................................................................................................................3a.i) Depicting the savings of Jenifer after 5 years:.....................................................................3a.ii) Depicting whether the deposits meet the 20% requirement:..............................................3a.iii) Depicting how much she needs to borrow after 5 years to buy the house:.......................3b.i) Calculating the fortnightly instalment amount:...................................................................4b.ii) Depicting the overall repayment made by Jenifer over 20 years and the interest amount:4c.i) Depicting the Jenifer’s monthly repayment if he pays off the loan in 10 years:.................5c.ii) Depicting the total repayment conducted in 10 years and the interest:..............................5c.iii) Depicting whether she continues to use 40% of the average salary after promotion willshe be able to make the payment:..............................................................................................5d.i) Depicting whether the new option could be able to meet the requirements of monthly loanamount:.......................................................................................................................................6d.ii) Depicting whether Jenifer should accept offer from her parapets:.....................................6Question 2:.................................................................................................................................7a.i) Calculating expected return of Portfolio AB:......................................................................7a.ii) Calculating expected return of Portfolio AC:.....................................................................7a.iii) Calculating expected return of Portfolio BC:....................................................................8b) Explaining the meaning of correlation and the impact of risk on the portfolio:....................9c) Explaining the meaning of diversification in finance and stating the impact ofdiversification on the above portfolio:.....................................................................................10Question 3:...............................................................................................................................11i) Depicting what is prospectus and its components, when it is issued and home does it needto be lodged in Australia:.........................................................................................................11

FUNDAMENTALS OF FINANCE2ii) Depicting the three listing requirements of ASX and stating in which industry will Siennabe listed:...................................................................................................................................12iii) Depicting the issue price of share and how much could be raised from the IPO:..............12iv) Depicting the process of acquiring shares of Sienna if IPO offer is missed:.....................12v) Depicting the decision of buying shares in Sienna through the IPO:..................................13Reference and Bibliography:....................................................................................................14

FUNDAMENTALS OF FINANCE3Question 1:a.i) Depicting the savings of Jenifer after 5 years:ParticularsAmountPer Month Salary6,666.67 Savings @40% per month2,666.67 number of months in 5 years60Interest rate0.25%Total savings after 5 years172,391.23 a.ii) Depicting whether the deposits meet the 20% requirement:ParticularsAmountLoan amount 600,000 The loan requirements 20%120,000.00 Total savings after 5 years172,391.23 The overall total saving is higher than the loan requirement of 20%, which coulddirectly help Jennifer take the relevant loan for her home.a.iii) Depicting how much she needs to borrow after 5 years to buy the house:ParticularsAmountLoan amount600,000 Total savings after 5 years172,391.23 Total loan amount needed from bank427,608.77 b.i) Calculating the fortnightly instalment amount:ParticularsValueLoan amount 480,000.00 Interest rate4%time20I0.15%N520

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