...BUSS 1002 Short Notes Date: Wednesday 20 June, 1.50pm Length: Exam is 3 hours + 10 minutes reading time SECTION A (key concepts and application) – worth 20 marks SECTION B (A-CA-R application to a business problem) – worth 30 marks SECTION C (company analysis – same format as Company Report; company will be from the aviation industry) – worth 50 marks All three sections will require you to draw on your knowledge in relation to the main themes taught throughout the semester. SECTION A NOTES 2. CSR & SUSTAINABILITY * Business’s are a key player in society change agents (force for good or evil) * Changing nature of society has brought with it changing attidutes * The role of business in society (GFC) * Responsibility to society and the environment (climate, resources, CSR & S) * Corporate Social Responsibility Continuum * CSR Reluctance * CSR Grasp * CSR Embedment (integrate social objectives w/ bus goals; balance social & eco profits) * Definition of CSR * Notion that corporations have a obligation to society to take into account not just their economic impact, but also their social and environmental impact * Five dimensions of CSR * Environmental, Social, Economic, Stakeholders, Voluntariness (ESESV) * Align with triple bottom line of economic, environmental and social goals. * The Challenge * Energy industry has allowed economic progress, provides power, heat, light...
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...FINM7407: Financial Institutions and Markets Seminar 02 Monetary Policy and Interest Rates Learning Objective: 2 Necmi K Avkiran, PhD Associate Professor in Banking and Finance UQ Business School n.avkiran@business.uq.edu.au http://www.users.on.net/~necmi/financesite/profile.htm Overview of the seminar Monetary policy RBA market operations Balance sheet of the RBA Determination of interest rates and factors that affect rates The yield curve Transmission mechanism Inflation and the Fisher Effect LIBOR and a bank’s funding curve BBSW Banks’ exposure to interest rate risk Case study: Crisis in Cyprus FINM7407 Seminar 02 2 Monetary Policy Monetary policy is an important tool used by governments to influence economic activity. Since 1984, it has taken a particularly simple form— the Reserve Bank of Australia (RBA) sets the overnight rate in the interbank market on unsecured loans, a.k.a. the ‘cash rate’. Currently, the cash rate on 15 July was 2.50%, with an inflation rate of 3% (see RBA’s web page to find more up-todate figures!). FINM7407 Seminar 02 3 Monetary Policy – continued Overview of Reserve Bank Objectives (i.e. ultimate targets) An ‘ultimate target’ of monetary policy is a variable the authorities seek to influence because of its welfare impact. Lower inflation has been the principal ultimate target for some time. Inflation target Stability of the Australian currency Maintenance of full employment...
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...mortgage crisis of United States and affected almost every country in the world. Australia entered into GFC with a strong position, as compared to the other OECD countries. Australian government implemented stimulus packages in order to deal with the situation. This reports looks at the consequences of the fiscal deficit on economic activity and its implications for Australia’s fiscal policy. Its direct impact on Australia was small – mostly increases in bank borrowing costs The case for fiscal stimulus was based on Keynesian model, which proposes a short term government spending to stimulate the economy during the recessionary period. However, Basic Keynesian model assumes that the exchange rate is fixed. The analysis shows that significant contributor for GDP (expenditure) was net exports over that period, not the consumption. This increase in demand was due to the depreciated Australian dollar and the strong demand for resources from China. Further, recent Australian National University (ANU) study shows that the cash bonuses provided to households were saved by majority of people (60%) who received the payments, either by paying off debt or by direct saving. Analysis of Australian stimulus package implementation and its impact on government budget reveals that...
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...Abstract This paper examines the widely accepted proposition that the fiscal stimulus saved Australia from the worst effects of the Global Financial Crisis (GFC). It presents theoretical and empirical arguments supporting the view that fiscal stimulus is ineffective in a floating exchange-rate regime. It underlines this by comparing Australia’s experiences in the East Asian Crisis of 1997 and the GFC of 2008–09. It concludes that a depreciating exchange rate protected the Australian economy in the 1997 crisis, but was prevented from doing so in the 2008–09 crisis by the fiscal stimulus. Theoretical Underpinnings The Mundell-Fleming model (Mundell 1963) throws light on the relative effectiveness of monetary and fiscal policy under different exchange-rate regimes. Here we will consider a very simple example of their results. We assume that capital is internationally mobile. Under this condition, the following relationship (called uncovered interest-rate parity) will be satisfied: RA = RO + e* where RA = the Australian interest rate. RO = the interest rate in a specific foreign currency and for the same term. e* = the expected depreciation of the Australian dollar against the specified currency in the period concerned. Capital flows will ensure that this relationship is satisfied. For example, if RO + e* is greater than RA, funds will flow out of Australia to take advantage of the perceived higher expected return overseas. This will cause either: an...
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...The Australian Financial System in the 2000s: Dodging the Bullet Kevin Davis* Abstract The global financial crisis (GFC) occupied only a quarter of the decade of the 2000s but, because of its severity and implications for future financial sector development, dominates the decade. The Australian financial system coped relatively well with the GFC, raising the question of whether there was something special about its structure and prior evolution which explains that experience. This paper reviews Australian financial sector performance and development over the decade, then provides a more detailed overview of the Australian GFC experience and its implications, and considers explanations for the Australian financial sector resilience. 1. Introduction The Australian (and global) financial system entered the first decade of the millennium preparing for a systems crisis, in the form of the Y2K computer scare, which on 1 January 2000 passed without event. But towards the end of the decade, the financial sector was faced with, arguably, its most serious systemic crisis ever, which the Australian financial system and economy weathered relatively well compared with advanced nations in the northern hemisphere.1 While the GFC occupied only one-quarter of the past decade (from mid 2007), it prompts the questions which this review must seek to answer. Was there something about the structure and evolution of the Australian financial system which explained its resilience in the face...
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...CONSUMER CREDIT IN AUSTRALIA DURING THE 20TH CENTURY Pierre van der Eng School of Management, Marketing and International Business College of Business and Economics Copland building 24 The Australian National University Canberra ACT 0200 Australia Fax +61 2 6125 8796 E-mail: pierre.vandereng@anu.edu.au Working Paper No: 489 ISBN: 0 86831 489 7 January 2008 JEL codes: D14, E21, E51, G23, N27 Keywords: Consumer Credit, Finance, Household Expenditure, History, Australia Consumer credit in Australia during the 20th century Pierre van der Eng1 School of Management, Marketing and International Business, Australian National University, Canberra, Australia Abstract This article surveys the growth of consumer credit in Australia during the 20th century, particularly after World War II. Until the 1970s, the regulation of Australia’s financial market caused formal consumer credit to be provided mainly by finance companies under hire-purchase contracts, largely for the purchase of cars and household durables. Deregulation of the financial market since the 1960s allowed banks to gain a dominant share in the market for personal loans. Quantification of long-term trends is difficult, but broad estimates suggest sustained growth in per capita indebtedness during 19452007. JEL classifications: D14, E21, E51, G23, N27 Key words: consumer credit, finance, household expenditure, history, Australia Introduction Living standards improved considerably in Australia during the 20th century...
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...Assessment Item 3- Case Study Due date: Friday of Week 12 Weighting: 40 % weighting (5 marks for in-text referencing & reference list, presentation, clarity of explanation and evidence of reading and research, original thinking backed by research supporting your argument/stance) Length: Approximately 2500 -3000 words ASSESSMENT Case Study is based on topics covering week’s 9-11 3 Objectives This assessment item relates to course learning outcomes 5 to 7 as listed in the course profile. Tasks to be undertaken: • Get a good understanding of GDP, unemployment, monetary policy, fiscal policy, and economic growth covering chapters 9-13 (macroeconomics) • Read the case study on- ‘Go get a job, says Costello’ • Make notes, which will help you to answer the questions by applying the theory to real life example of economics at work. • Apply the DADA (Definitions, Assumption, Diagram and Analysis) while answering the economic questions. On campus students will be attempting some exercises in the workshop sessions. Off campus students should attempt weekly activities from the textbook boxed case studies. These exercises will help and guide you how to think like an economist. Look for theory and apply it to real life examples from “Case Study. • Plagiarism is an issue. Make sure you include in-text references and provide a reference list. • The focus of your task for this assignment in the next four weeks is to elicit and apply economic concepts ...
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...news article discusses the strong revival in the Australian job market seen in the month of March. More than 44000 jobs were created in the month of March across the nation which showed great signs of growth and production. It also says that unemployment rate is steady at the rate of 5.2 percent. The increase in number of jobs surpassed all the expectations of economists which estimated it to be 5000 in the month due to 15000 lost jobs in the month of February. Economists now estimate that due to strong job market and higher production levels, Reserve Bank of Australia (RBA) may undermine expected interest rate cuts. It had managed to keep cash rate at 4.25 percent but hinted at possible rate cuts in the month of May There are no signs that economy is underperforming but RBA would decide on possible rate cuts only after release of CPI data later this month. If inflation rates are under control, then only RBA will implement rate cuts. (Alfredo Saad-Filho,2000) Overall, economy is showing positive signs of growth with higher production levels due to increased number of jobs. This will in turn increase...
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...2011 Department of Business Administration, School of Business, University of Nairobi, Kenya Electronic copy available at: http://ssrn.com/abstract=1784297 TABLE OF CONTENTS Declaration List of Tables List of Figures Appendices Abbreviation CHAPTER ONE: INTRODUCTION 1.0. 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. Background of the Study The Conceptual Basis of Social Security Schemes The Kenyan Contextual Basis of Social Security Problem Statement Research Questions and Objectives Research Hypotheses Importance of the study 1 3 10 19 22 22 23 CHAPTER TWO: LITERATURE REVIEW 2.0. Introduction 2.1. Review of Theoretical Literature on Financial Viability of Pension Schemes 2.2. Review of Empirical Literature of Studies on the Solvency of Pension Schemes 2.3. Models for Evaluating the Financial Viability of Pension Schemes 2.4. A Summary of the Knowledge and Research Gaps 25 25 46 60 68 REFERENCES APPENDICES i Electronic copy available at: http://ssrn.com/abstract=1784297 GLOSSARY CAC CALPERS CAPSA CBS C-D CEO CGE CSR DB DC E.T.I EME ERISA FMA GASB GDP GSP INPFRS INSS IPD IRA IRBS KNAO KNBS LUPFUND NSE NSSF NYSCRF OECD OSFI PBGC PLC PPF PPR PROST PRPOPS PSPS PSSS RBA SAM SIPO SOX SSNIT SSS Commonwealth Authorities and Companies Act CEO California Public Employees Retirement System The Canadian Association of Pension Supervisory Authorities Central Bureau of Statistics Cobb-Douglas economy Chief Executive Officer Computable General Equilibrium Corporate Social Responsibility Defined Benefit...
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...The impact of the global financial crisis on social services TABLE OF CONTENTS EXECUTIVE SUMMARY ......................................................................................................... 1 1. 2. Introduction ...................................................................................................................2 Background: an overview of the financial crisis........................................................ 4 2.1 2.2 2.3 Origins of the global financial crisis .....................................................................................4 Impacts on the real economy...............................................................................................4 Implications for the economic outlook..................................................................................5 Macroeconomic overview ....................................................................................................6 Key impacts on low-income households............................................................................13 The social services sector..................................................................................................17 Services provided to individuals and families ....................................................................21 Capacity of the system to deliver .......................................................................................27 3. Australia’s economic outlook ......................
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...Review of consumer protection measures in the travel and travel related services market in Australia including the role of the Travel Compensation Fund Submission by Australian Federation of Travel Agents April 2010 Contact Mr Jayson Westbury Chief Executive Officer, AFTA 309 Pitt Street Sydney NSW 2000 T: 02 9287 9900 E: afta@afta.com.au Without a travel agent, you are on your own AFTA submission to Ministerial Council on Consumer Affairs Review of consumer protection measures in the travel and travel-related services market including the role of the Travel Compensation Fund Page 2 AFTA submission to Ministerial Council on Consumer Affairs Review of consumer protection measures in the travel and travel-related services market including the role of the Travel Compensation Fund Who is AFTA? The Australian Federation of Travel Agents Ltd (AFTA) was founded in 1957 to: establish professional standards for travel agents; stimulate, encourage and promote travel; bring together those acting as intermediaries in the distribution of travel services; and build strong working relationships with suppliers and consumers of travel related services. AFTA represents approximately 70% of Australia’s travel intermediaries that control more than 90% of travel intermediary turnover. It also has a substantial base of associate members, representing non-intermediary sectors of the travel related services industry. Members are bound by AFTA’s Code of Ethics. AFTA represents...
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...Australia. The contents of this publication shall not be reproduced, sold or distributed without the prior consent of the Reserve Bank of Australia. ISSN 1320-7729 (Print) ISSN 1448-5109 (Online) Electronic copy available at: http://ssrn.com/abstract=2498294 Is Housing Overvalued? Ryan Fox* and Peter Tulip** Research Discussion Paper 2014-06 July 2014 * Financial Stability Department ** Economic Research Department Reserve Bank of Australia Thanks to Tom Cusbert, Luci Ellis, Richard Finlay, Alex Heath, Jonathan Kearns, Christopher Kent, David Lancaster, Tony Richards, Nigel Stapledon, Iqbal Syed, Chris Stewart and Marc-Oliver Thurner for helpful comments and discussions. We would like to acknowledge earlier RBA research by Robert Johnson. Views in this paper are those of the authors and not necessarily those of the Reserve Bank of Australia. Authors: foxr and tulipp at domain rba.gov.au Media Office: rbainfo@rba.gov.au Abstract This paper examines whether it costs more to own a home or to rent. We argue this is a useful criterion for assessing housing overvaluation. We use a new Australian dataset, which includes prices and rents for matched properties, letting us value housing in levels. We find that if...
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...Assignment Task The four largest Australian Banks have faced considerable pressure from the community and the government in recent times. This pressure has arisen due to their interest rate increases in association with their high reported earnings. As accountants, we are responsible for preparing financial statements and “calculating” the profit figures. In your opinion, do you think the big banks are managing their reported earnings to show lesser profits than what they are actually earning (i.e. using earnings management techniques)? You are required, and must, read and incorporate academic journal articles and other relevant materials to justify your viewpoint. INTRODUCTION Accounting can be broadly defined as the ‘measurement and communication’ of economic information to the decision makers (Watts and Zimmerman 1986). Accounting is divided into internal and external accounting on the basis of the users of the information (Spohr 2005). Spohr (2005) further highlights that the responsibility for preparing the external accounting information and publishing it lies with the managers of the firm. These managers rely on their inside knowledge of the firm’s current state to provide an accurate and fair picture of the financial state of the firm. The existence of accounting regulations and guidelines aims to improve the relevance and accuracy of the financial reports. However, this insider knowledge gained by managers can lead to information asymmetry. This occurs when...
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...Emergency Preparedness Planning Guidelines Version 3, October 2006 Table of Content Foreword 4 Part 1 - Introduction to Emergency Preparedness Planning 5 CARE Approach to Emergency Preparedness 5 Measurement of Preparedness 6 Emergency Preparedness and Contingency Planning 6 Emergency Preparedness Planning Steps 8 Writing and Distributing the Plan 8 Monitoring and Updating the Plan 8 Part II – The Written Plan 10 Executive Summary 10 1. Formation of Emergency Response Team 10 2. Information Collection 11 3. Country Office Capacity Inventory 12 3.1. Country Office Organization Chart 13 3.2. Country Office Human Resources 13 3.3. Country Office Physical Resources 13 3.4. Country Office Key Staff Contact Information 13 3.5. RMU, CARE Lead Member, and CARE International Key Contacts 13 3.6. In Country Coordination Mechanisms and Contacts 13 4. Risk Analysis 13 5. Scenario Development 15 5.1. Scenario 1 16 5.1.1. Scenario Description 16 5.1.2. Impact Analysis 16 5.1.3. Identification of Risk Reduction Measures 17 5.1.4. CARE Prevention and Mitigation Measures 19 5.1.5. CARE Response Strategy 19 5.1.5.1. Criteria for Engagement 20 5.1.5.2. Partnership Analysis 20 5.1.5.3. Geographical Focus 21 5.1.5.4. Objectives of CARE Interventions 21 5.1.5.5. Trigger Indicators 21 5.1.5.6. Key Interventions/Actions 22 5.1.5.7. Entry and Exit/Transition Strategy 24 5.1.6. Local Considerations 24 ...
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...TABLE OF CONTENTS ABSTRACT…………………………………………………………. 2 ACKNOWLEDGMENT……………………………………………... 3 I. Introduction 1. Background of the study …………………………………. 4 2. Statement of Problem……………………………………… 5 3. Hypothesis………………………………………………… 6 4. Research objective………………………………………… 6 5. Research Question………………………………………… 6 6. Significance of Study……………………………………… 7 7. Scope and Limitation of the Study………………………… 7 8. Research Methodology……………………………………. 7 II. Literature Review……………………………………………… 8-9 III. Discussion III.1. Interest rate versus exchange rate in Bank deposit……… 10 III.1.1 Appreciate US Dollar in Bank Deposit factor…10-11 III.1.2 Depreciate US Dollar in Bank Deposit factor….. 11 III.2. Interest rate affected in Stock market…………………... 11 III.2.1 Depreciate US Dollar in Stock Market………..11-12 III.2.2 Appreciate US Dollar in Stock Market..................12 IV. Conclusion……………………………………………………… 13 V. References…………………………………………………….14-15 Abstract In this paper, I use high frequency data to investigate the extent to which interest rate changes originated in the United States by the Reserve Federal Fund. More specifically, I am interested in understanding in effects of changes in the Federal Reserve Fund’s interest rates on differential between (short term) local currency interest rates. I also investigate how interest rate influences to the foreign exchange market when Federal set the interest rate. The result indicates that Federal Reserve’s rate...
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