just multiple choice and short questions ..........................

Wentworth Institute ASSESSMENT COVER SHEET STUDENT SURNAME: UNIT CODE NO: FNSINC601 STUDENT FIRST NAME: UNIT NAME: Apply economic principles to work in the financial services industry ASSESSOR'S NAME: STUDENT NUMBER: ASSESSMENT TASK: CLOSED BOOK EXAM DATEOF ASSESSMENT: ELEMENTS OF PERFORMANCE CRITERIA(S) ELEMENTS 1, 2,3 & 4 STUDENTS SIGNATURE: ___________________________ DATE: _______________ Assessment Task 1 This assessment consists of 1 (One) part all of which must be answered. The instructions to complete this assessment are included on the following page. Follow the instructions with each question. V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry Multiple - Choice questions For each question select the best one of the four options available 1. Scarcity exists a. When people consume beyond their needs b. Only among poor individuals c. In all countries of the world d. Only in poor nation 2. Which of the following is not a factor of production? a. Land b. Labour c. A financial asset d. Capital 3. Parking meters on city streets are there primarily because a. Scare parking places are being rationed by requiring payment for them. b. Order must be brought to parking practices. c. Cars harm the environment. d. The city needs the revenue. 4. Which of the following sets of decisions must be made by all economies? a. How much to produce? When to produce? How much does it cost? b. What is the price? Who will produce? Who will consume it? c. What to produce? How to produce it? For whom to produce it? d. None of the above. 5. The demand for good X is downward sloping. This means that an increase in the prise will result in a. An increase in the demand for good X. b. A decrease in demand for good X. c. A larger quantity demanded for good X. d. A smaller quantity demanded for good X. 6. Which of the following is the result of an increase in the price of takeaway pizza, other things being equal? a. A leftward shift in the demand curve for takeaway pizza. b. A downward movement along the demand curve for takeaway pizza. c. A rightward shift in the demand curve for take away pizza. d. An upward movement along the demand curve for take away pizza. 7. An improvement in technology causes a. A leftward shift of the supply curve. b. An upward movement along the supply curve. c. A firm to supply a larger quantity at any given price. d. A downward movement to supply curve. 8. Assume that the equilibrium price of a good $30. If the market price is $17 then a. A shortage will cause the price to remain at $17. b. A surplus will cause the price to fall below $17. c. A shortage will cause the price to rise towards $30. d. A surplus will cause the price to rise towards $30. 9. An increase in consumer income increases the demand for air travel. As a result of the adjustment to a new equilibrium, there is a. A downward movement along the supply curve. b. A leftward shift to supply curve. V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry c. A rightward shift to supply curve. d. An upward movement along the supply curve. 10. Which of the following is the best example of public good? a. Defence. b. Education. c. Psychiatric services. d. Public swimming pools. 11. Which of the following is the cause of an increase in total revenue? a. Price increases when demand is elastic. b. Price decreases when demand is elastic. c. Price increases when demand is unitary elastic. d. Price decreases when demand is inelastic. 12. If a 27% reduction in the price of a good produces a 9% increase in the quantity demanded, the price the price elasticity of demand over this range of the demand curve is a. Elastic. b. Perfectly elastic. c. Unitary elastic. d. Inelastic. e. Perfectly inelastic. 13. Fixed inputs are factors of production that a. Cannot be increased or decreased to change output. b. Can be increased or decreased quickly to change output. c. Include all inputs except labour. d. None of the above. 14. An example of variable input are a. Raw materials b. Energy. c. Hourly labour. d. All of the above. 15. Suppose a car wash has four washing bays and 10 employees and is able to wash 200 cars per day. When it adds a fifth bay, but no more employees, it is able to wash 230 cars per day. The marginal product of the third washing bay is a. 230 cars per day b. 20 cars per day c. 30 cars per day d. 23 cars per day 16. The total fixed cost curve is a. Upward sloping b. Downward sloping c. Upward sloping then downward sloping d. Unchanged with the level of output 17. Which of the following is a characteristic of perfectly competition? a. Entry barriers b. A small number of firms c. Differing quality of service d. None of the above. 18. Wontileaks is a perfectly competitive firm that fixes leaks in Canberra. It sells its service for $110 per leak. Its minimum average variable cost is $111 per unit. The firm should V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry a. Increase output b. Decrease output , but not shut down c. Maintain its current rate of output d. Shut down 19. Which of the following statements is true? a. All monopolies are created by the government b. The monopolies never takes a loss c. The monopolist charges the highest possible price d. None of the above statements is true. 20. A monopolist sets the a. Price at which marginal revenue equals zero b. Price that maximises total revenue c. Highest possible price on its demand curve d. Price at which marginal revenue equals marginal cost 21. Short - run profit maximisation for a perfectly competitive firm occurs where the firm's marginal cost equals a. Average total cost b. Average variable cost c. Marginal revenue d. None of the above 22. Which of the following involves price discrimination? a. A department store has a 25% off sale b. A publisher sells economics books at lower price in Newcastle c. Manufactures of cars in Japan sell cars at higher prices in the US than Japan d. The phone company charges higher long distance rates during the day 23. The 'big four' Australian banks operate alongside dozens of smaller banks in an industry described as a. A monopoly b. Perfect competition c. Monopolistic competition d. Oligopolists 24. Ease of entry into a market is a characteristic of a. Perfect competition b. Monopolistic competition c. Both a & b d. Oligopoly 25. Ease of entry into a market is a characteristic of a. Perfect competition b. Monopolistic competition c. Both a & b d. Oligopoly 26. The market structure that economists generally consider is best for the economic welfare of the community is a. Monopolistic competition b. Monopoly c. Perfect completion V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry d. Oligopoly 27. Which of the following types of carbon reduction policies is generally preferred by economists? a. mandated use of green energy b. subsidies for solar and wind power c. a tax on petrol and diesel fuel d. a carbon trading scheme 28. The dollar value of all final goods and services produced within the borders of a nation is the a. GNP b. Gross national income C. Gross domestic product d. gross national expenditure 29. Gross domestic product data that reflect actual prices as they exist in a given year are expressed in terms a. variable dollars b. real dollars c. constant dollars d. current dollars 30. Inflation is a. a result of high unemployment b. not a concern during war c. an increase in the general price level d. an increase in relative price level 31. If inflation is running at 3 percent and a borrower agrees to pay 7.2 % interest per annum, the real interest rate the borrower is paying is approximately V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry a. 4.2% b. 10.2% c. -4.2% d. 2.4% 32. Unemployment due to recession is a. involuntary unemployment b. cyclical unemployment c. structural unemployment d. frictional unemployment 33. Deflation is a. a decrease in price b. a situation that never occurs c. a decrease in general price level d. a decrease in inflation rate. 34. The goal of monetary policy in Australia a. to keep interest rates at desired level determined by the RBA b. to keep inflation between 2 to 3 percent per annum over the course of the business cycle c. to maintain unemployment at as low rates as possible d. to minimise the deviation of economic growth from its long term sustainable level 35. Which is not an example of expansionary fiscal policy a. increase government spending b. decrease taxes c. a & b c. increase taxes V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry 36. Which of the following would be represented by a shift in the aggregate demand curve to the left? a. an increase in exports a decrease in investment c. an increase in government spending an appreciation of Australian dollar. 37. The real balances effect occurs because a higher price level will reduce the real value of peoples a. unpaid debt b. financial assets c. wages d. physical investments 38. Keynes believed that the a. price system was very flexible both upwards and downwards b. government should attempt to restore full employment when private demand was insufficient c. the goal of full employment was possible d. price flexibility will, in reasonable time frames, automatically adjust the economy to full employment 39. A decrease in the debtors' collection period may indicate: a. b. c. d. Efficiency in paying suppliers Efficiency in stock control Efficiency in paying expenses Efficiency in credit management 40. An increase in the gross profit margin could be due to: a. b. c. d. Increased sales Decreased purchases Either of the above None of the above V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry 41. Return on investment can be calculated using: a. Sales multiplied by net profit margin b. Net profit divided by net assets c. Net profit margin multiplied by asset turnover 42. An increase in the rate of stock turnover could be a result of: a. b. c. d. Decrease in sales Decrease in gross profit margin Increase in stock level None of the above 43. The P/E ratio represents: a. b. c. d. A market valuation of the company A measure of a firms profitability Earning per shares divided by the share's price The share price as a multiple of share earnings 44. An increase in the debt to equity ratio could also result in: a. b. c. d. An increase in the times interest coverage An increase in the debt to operating cash flows A decrease in the earnings before interest and taxes A decrease in the earnings per share 45. A (n) _______ cost is always an irrelevant cost when making decisions. a. b. c. d. opportunity fixed past Indirect 46. An activity with relatively high fixed costs compared with its variable costs is said to have a high _____________________________________. a. b. c. d. level of financial gearing level of operating gearing margin of safety contribution-to-fixed cost ratio 47. Profit is __________________________ when marginal sales revenue equals the marginal cost of production. a. b. c. d. in equilibrium reduced minimised maximised V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry 48. To be relevant to a particular decision, a cost must satisfy the following criteria: 1. It must relate to the objectives of the business. 2. It must involve an outlay of cash. 3. It must differ between possible courses of action. 4. It must be based on objective, verifiable evidence. Which two of the above statements are correct? a. 1 and 2 b. 1 and 3 c. 2 and 4 d. 3 and 4 Checklist for Assessment Assessment 1 Student Name: Assessor Name: Unit of Competency: FNSINC601A Apply economic principles to work in the financial services industry Elements and Performance Criteria(s) Elements 1, 2,3& 4 Note any special conditions: Assessor Comments V1.0 February 2015FNSINC601 Apply Updated by Kazi C NYC economic principles to work in the financial services industry Multiple choice questions Result : C NYC Feedback to student This signature confirms that the student agrees that the above record is a true reflection of the task performed. Student signature: ___________________Date:_________________________ Assessor signature: __________________ Date:_______________________ V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry Wentworth Institute ASSESSMENT COVER SHEET STUDENT SURNAME: UNIT CODE NO: FNSINC601 STUDENT FIRST NAME: UNIT NAME: Apply economic principles to work in the financial services industry ASSESSOR'S NAME: STUDENT NUMBER: ASSESSMENT TASK: PORTFOLIO DATEOF ASSESSMENT: ELEMENTS OF PERFORMANCE CRITERIA(S) ELEMENTS 1, 2, 3& 4 STUDENTS SIGNATURE: ___________________________ DATE: _______________ Assessment Task 2 This assessment consists of 1 (One) part all of which must be answered. The instructions to complete this assessment are included on the following page. Follow the instructions with each question. V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry Answer the following questions: 1. What is meant by opportunity cost? How is relevant when people make economic 2. 3. 4. 5. 6. 7. choices? What is the difference between microeconomics and macroeconomics? What determines how much producers supply of a product? How market prices are determined and when are they likely to rise or fall? What are the major strengths and weaknesses of a free market economy? How the elasticity of demand or supply does affect the working of markets? What will happen if the government sets a price either above or below the market equilibrium? 8. What are meant by economies of scale and what are the reasons for such economies? 9. Why does operating under conditions of perfect competition make being in business a constant battle for survival? 10. Why might firms charge different consumers different prices for an identical product? 11. What can government do when market fails? 12. What is the difference between systematic and unsystematic risk? 13. What effects powerful employers and trade unions have on wages and employment? 14. Why does the demand for all goods and services vary from year to year? 15. What is the relationship between money and interest rates? What is the role of various financial institutions in this relationship? 16. Why does Reserve Bank of Australia play a crucial role in the functioning of economies? 17. What is meant by balance of payments and how do trade and financial movements affect it? Checklist for Assessment Assessment 2 Student Name: Assessor Name: Unit of Competency: FNSINC601A Apply economic principles to work in the financial services industry Elements and Performance Criteria(s) Elements 1, 2,3& 4 Note any special conditions: V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry C Assessor Comments NYC Portfolio Result : C NYC Feedback to student This signature confirms that the student agrees that the above record is a true reflection of the task performed. Student signature: ___________________Date:_________________________ Assessor signature: __________________ Date:_______________________ V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry Wentworth Institute ASSESSMENT COVER SHEET STUDENT SURNAME: UNIT CODE NO: FNSINC601 STUDENT FIRST NAME: UNIT NAME: Apply economic principles to work in the financial services industry ASSESSOR'S NAME: STUDENT NUMBER: ASSESSMENT TASK: CASE STUDIES DATEOF ASSESSMENT: ELEMENTS OF PERFORMANCE CRITERIA(S) ELEMENTS 1, 2, 3 & 4 STUDENTS SIGNATURE: ___________________________ DATE: _______________ Assessment Task 3 This assessment consists of 1 (One) part all of which must be answered. The instructions to complete this assessment are included on the following page. Follow the instructions with each question. V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry Answer the following questions: 1. The table below shows a student's annual income and the number of times that she visits a club each year. a. Plot a scatter diagram. b. Try to fit a line through these points. c. Suggest a relation between income and clubbing. d. Which causes which? Income($) Number of club 1000 17 2000 23 3000 32 4000 38 visits 2. Air conditioners are luxury goods. a. Name two countries that you expect to have the highest per capita demand for air conditioners at present. b. If people continue to richer and global warning continues to increase, what is likely to happen to the quantity of air conditioners demanded? c. And what will this do to global warning? And hence to the demand for air conditioners? 3. Examine the following table and deduce what is the profit maximising level of output: Output(units 1 2 3 4 5 6 ) Marginal 4 5 6 7 8 9 cost Marginal 8 7 6 5 4 3 revenue 4. A new government imposes a ceiling on rents in order to help poor students. a. If you are a private landlord, what is the immediate effect on the quantity of b. student flats that you supply? If the ceiling persists for ten years, what do you think has now happened to the total supply of student flats? V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry c. Is the supply elasticity of student flats higher in the sort run or in the long run? 5. A monopolist produces at constant marginal cost of $5 and faces the following demand curve: Price($) Quantity 8 1 7 2 6 3 5 4 4 5 3 6 Calculate the MR curve. What is the equilibrium output? Equilibrium price? What will be the equilibrium price and output for a competitive market? Why does monopolist make less output and charge a higher price. 6. ABC Ltd sells 7000 units of product per year. Carrying costs are $1 per unit per annum and the cost of placing each order is $35. The purchase price per unit is$3. Calculate: a. The economic order quantity b. The number of orders to be placed during the year c. The total inventory cost per annum. 7. You want to purchase a new wide- screen television for $5400. You have $400deposit and can obtain a loan for the balance at 14.5% flat rate over 5 years. a. What will be your monthly loan repayment on instalments? b. Approximate the effective rate of interest on loan. 8. You have $800 deposit. a. What will be your investment worth in six years if interest is compounded at 6% per annum? b. What rate of interest it would be required to achieve a compound value for your deposit of $1341.68 in six years? c. At 7% interest, how long will it take for your deposit to reach a total value of $1122.08? 9. A firm is considering two mutually exclusive programs, P1 and P2. Each program will cost $60000 to introduce and will last for 7 years. The annual after tax cash flows from P1 will be $18000 , while P2 will provide the following: Year 1 2 3 V1.0 February 2015FNSINC601 Apply Updated by Kazi Annual cash flows (4000) 20000 40000 economic principles to work in the financial services industry 4 5 6 7 30000 20000 20000 10000 10. It will cost $115000 to buy a new machine. The firm will also incur additional costs of $7900 installation and staff training. The machine will last for 10 years and generate after- tax cash flows $20000 each year of its life. The company has a cost of capital of 14%. a. What is the internal rate of return on this machine? b. Should the machine be purchased? 11. Bright electric Ltd declared a dividend of 17 cents per share during the year. The share price at the beginning of the year was $1.60 and at the end was $1.67. What was the shareholders return on investment? 12. ABC Ltd sells 7000 units of a product per year. Carrying costs are $ 1 per unit per annum and the cost of placing each order is $35. The purchase price per unit is $3. Calculate: a. The economic order quantity b. The number orders to be placed during the year c. The total inventory cost per annum 13. The following information was taken from annual reports from two companies in the same industry. A B Total assets 970000 540000 Sales 520000 360000 Profits before interest and tax 140800 100800 Profit after tax 65000 10400 Interest 37000 18000 Non-current liabilities 640000 257000 a) Calculate the following ratios and percentages for each of the company: V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry I. II. III. IV. V. Profit after tax as a percentage of sales Asset turnover Return on investment( DuPont) Times interest coverage Non- current liabilities of total assets Checklist for Assessment Assessment 3 Student Name: Assessor Name: Unit of Competency: FNSINC601A Apply economic principles to work in the financial services industry Elements and Performance Criteria(s) Elements 1, 2,3& 4 Note any special conditions: C Assessor Comments NYC Case studies Result : C NYC Feedback to student This signature confirms that the student agrees that the above record is a true reflection of the task performed. Student signature: ___________________Date:_________________________ Assessor signature: __________________ Date:_______________________ V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry V1.0 February 2015FNSINC601 Apply Updated by Kazi economic principles to work in the financial services industry