Case Study:

Jane McDonald is a 28-year-old solicitor at a law firm in Sydney. Jane rents a studio apartment near the Sydney central business district, paying $650 per week. She estimates her other living expenses amount to $24,000 per annum. She has an income of $95,000 per annum after tax. She has a balance in her savings account of $80,000, which she has accumulated since commencing full-time work at the age of 23.

She owns a late model 2016 Honda Civic worth $10,000 and has no plans to purchase a new car. She has a credit card with a limit of $5,000, which she fully pays off each month.

Recently, Jane received an inheritance from her grandmother of $150,000. Jane is unsure what to do with these funds. She has always entertained the hope that one day she would be able to buy a property of her own to live in, rather than paying, as she puts it, 'dead-end rent'. However, until recently this seemed an impossible dream.

The impact from COVID-19 in 2020 has created some uncertainty in her life. The major issue has been concerns regarding job security. Whilst she has been told by her manager that her job is safe, some other solicitors in her firm recently lost their jobs.

Questions (3):

Jane comes to you for advice relating to the following questions around:

• Domestic equity market performance.

For this factor, you are required to provide:

1.An explanationof the factor, covering the current market environment applicable to that factor?

2.An explanation of how monetary and fiscal policy changes could influence the factor?

3.A clear and focussed explanation of how that factor and any monetary and fiscal changes has an influence on one (1) of Jane's investment objectives ofyour choosing?

Hints:

LO1: Explore the role of intermediaries in financial markets.

LO2: Explain the impact of current issues and key economic and financial indicators on the Australian and global financial markets.

LO3: Analyse the impact of government and monetary policy on the Australian financial markets.