Question

Hello, could you please help me with the following question? Please...

Hello, could you please help me with the following question? Please relate answers to the current COVID market environment. I have provided the formatting of the answers below.

CASE STUDY

Jane McDonald is a 28-year-old solicitor at a prestigious 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 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, rather than paying, as she puts it, 'dead-end rent'. However, until recently this seemed an impossible dream.

Jane comes to you for advice relating to the following objectives:

• Is she able to buy her own property?
• Is it the right time to buy a property?
• Should she invest her cash elsewhere?

Jane is most concerned about making any decisions in light of the following factors, which have been topics of discussion amongst friends and colleagues:

1. Labour market conditions
2. Interest rate environment
3. Global economic influences on the Australian economy
4. Local property market conditions
5. Global and domestic equity market performance.

QUESTION:

You will need to link any of the above objective(s) to all 5 factors. Please use one or more of the 3 objectives.

Impact of economic variables and government policies

The case study mentions five (5) factors that Jane is concerned about.

For each factor listed, you are required to provide:

• Description of factor
• Impact of factor on chosen objective
• Explanation of how the Government Fiscal Policy and RBA Monetary Policy influences the chosen objective

Hints:

• As the focus in the question is on economic and financial policy, do not attempt to answer the question as if you were wearing a lending banker's hat. Noactualborrowing advice or financial calculations are required.The question is about the impact of economic variables and government policies, including fiscal policy.

Learning outcomes:

• Explore the role of intermediaries in financial markets.
• Explain the impact of current issues and key economic and financial indicators on the Australian and global financial markets.
• Analyse the impact of government and monetary policy on the Australian financial markets.
• Explore the main sources of law and the regulatory structure of financial services law in Australia.

Marking Guide:

• clear and concise description of each factor, including current conditions and expectations
• excellent understanding shown of how each factor impacts or influences one or more of the client objectives
• sound analysis of the influence of central bank and government policy on each of the factors
• evidence of external research with appropriate references

ANSWERS:

a) Factor 1: Labour market conditions

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s)) - HIGH RATE OF UNEMPLOYMENT?
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)

b) Factor 2: Interest rate environment

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s)) - MONETARY POLICY / RECENT RBA DECISION?
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)

c) Factor 3: Global economic influences on the Australian economy

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s))
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)

d)Factor 4: Local property market conditions

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s))
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)

e)Factor 5: Global and domestic equity market performance

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s))
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)