Question 14 The Australian Prudential Regulator Authority (APRA) is responsible for the prudential supervision of authorised depository institutions (ADIs). What is prudential supervision. Discuss the importance of effective prudential regulation. [2 marks] Question 15 The manager of your local bank said ABC Ltd's application for a business loan does not satisfy the matching principle. In relation to funding of assets, explain the 'Matching Principle'. [1 mark] Question 16 Vodafone Ltd has identified an investment opportunity that could improve the company's growth by 5% in five years. To fund the investment opportunity, Vodafone is considering raising additional capital by 'pro-rata rights issue' or "placement'. Explain to the Chief Financial Officer of Vodafone each of these two funding alternatives and discuss the advantages and disadvantages of each alternative. Your explanation of prorate rights issue should include the concept of 'renounceable right'. [5 marks]