Financial Literacy and Ethical Considerations in Investments

This assignment addresses three scenarios related to financial literacy and ethical considerations in investment decisions. The first scenario involves Jayne, who lacks a budget and spends impulsively, highlighting the importance of financial planning for young adults. It recommends assessing financial needs, setting objectives, and creating a budget to achieve financial stability. The second scenario discusses Bruce's concerns about financial misconduct revealed by the Royal Commission into Financial Institutions in Australia, where financial planners provided biased advice for commission fees. It advises Bruce to analyze various aspects and select financial services based on his risk and return profile, emphasizing that not all financial intermediaries are unethical. The final scenario presents Martha, who overhears potentially market-sensitive information about Dragon Gold. It suggests evaluating the company's financial condition and performance before investing, cautioning against trading on non-public information and assessing her risk-return profile.

Running head: FINANCIAL LITERACY
Financial Literacy
Name of the Student:
Name of the University:
Author’s Note:

Table of Contents
In Response to Question 1...............................................................................................................3
In Response to Question 2...............................................................................................................3
In Response to Question 3...............................................................................................................4

In Response to Question 1
Jayne should prepare and asses the financial needs and objectives for himself thereby
assessing the financial condition of Jayne. Jayne should asses the financial objectives and
financial goals so that he can achieve the same sustainably and well through proper planning. A
financial budget for Jayne would help him determine the sources of income and the key
expenses. A proper financial plan is needed for every individual so that he can assess the various
possible opportunities available for him and the financial goals. Though assessed the financial
condition of Jayne is based on the income generated and he should start planning for a stable and
a better financial condition of Jayne.
In Response to Question 2
The Royal Commission of Australia though found that there were some of misconduct
observed in the banking, superannuation and financial industry by some of the banks and the
financial institutions and the same had a deeper implication on the performance and the operation
of the financial industry. There were several charges and allegations made that the banks and
financial institutions are charging the customers for services, which were not actually taken by
the consumers. The banks and financial institution also held the company for encouraging
customers for taking up products and services, which provided extra benefits to the banks and
financial institutions. However, it is recommended that Bruce should analyze various aspects,
select a product or a financial service according to the risk, and return profile of the customer.
Definitely, it is for sure that not all banks and financial intermediaries are engaged in
wrongdoing and it is always advisable for the customers to assess the current scenario and the
business factors, which affects the financial objective of an investor.

In Response to Question 3
The evaluation and assessment of the share for the Dragon Gold company should be
based on the assessing the financial condition of the company and the relevant necessary
operation of the company. Martha overheard about the company and some material information
in respect to the company, which can significantly influence the share price of the company as
the news about the same is sensitive. Martha should asses various aspects about the company and
should evaluate and asses the performance of the company and the relevant news gathered by
him before investing into the company and taking significant position or exposure with the
company. However, it is not ethical to trade on material non-public information gathered by
Martha as the same can significantly influence the share price of the company. Martha should
also asses his risk return profile in comparison with the asset class invested.