1. A new customer of your bank would like to know more about two types of financial instruments: equity and debt. Explain and discuss the main features of each financial instrument to the customer.[1 mark]
2. The customer in part (a) would like to invest in new shares issued by ABC Ltd. but is concerned about access short-term liquidity. Explain to the customer the distinction between primary and secondary markets and why Australia's well-developed secondary market would meet their liquidity needs.[1 mark]
3. Everest Corporation (EC) plans to issue debt instruments into the international capital markets to raise funds. Explain to the chief financial officer (CFO) of EC the function of capital markets and the relationship between the issue of paper into the international capital markets and the foreign exchange market.[1 mark]
4. John is an energetic twenty-eight years old and busy entrepreneur concerned with the financial security of his family (wife, 5 years old daughter, and 3 years old son) in case he was involved in an accident and unable to work again or died suddenly. Briefly explain to John the distinguishing characteristics of whole-of-life and term-life policies provided by Life insurance offices. Which policy would you recommend to John to consider subscribing to?[2 marks]