Sample Assessment Tasks
Accounting and Finance
General Year 11
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Sample assessment task
Accounting and Finance – General Year 11
Task 1 – Unit 1
Assessment type: Project
Conditions
Period allowed for completion of the task: 2 weeks
Task weighting
5% of the school mark for this pair of units
______
Your great-aunt Henrietta, has left you and your two brothers $300,000. As your aunt had no children of her own, she left instructions in her will that you were to receive $100,000 each.
Research the different investment opportunities available to you and decide where you think it would be best to invest your $100,000. Then again, you and your brothers may decide to pool your money and invest the $300,000 together. It’s your choice!
Resarch and compare three (3) investment options available:
· shares
· property
· cash deposits.
1. For each of these investment options (i.e. share, property and cash deposits):
· explain three (3) features (9 marks)
· describe the process for investing (6 marks)
· identify the expenses involved. (3 marks)
2. Explain the concepts of risk and return and apply these concepts to each of these
investment options. (8 marks)
3. a) For each of these investment options, identify two (2) advantages and
two (2) disadvantages (12 marks)
b) Which of these investment options would you choose? Provide three (3)
reasons to justify your choice. (6 marks)
4. Explain one (1) factor which would influence your decision to invest individually or
with your siblings. (2 marks)
5. Provide two (2) alternative investment options for the $300,000 (i.e. other than
investing in shares, property, or cash deposits). (4 marks)
6. Outline two (2) financial institutions other than banks that cater for the financial
needs of individuals. (2 marks)
7. Explain what a financial scam is, and two (2) measures you can take to avoid being
caught up in financial scams. (6 marks)
8. Select a government agency (such as Department of Commerce) and outline its
role in relation to personal finance. (2 marks)
Total = 60 marks
Marking key for sample assessment task 1 – Unit 1
1. For each of these investment options (i.e. share, property and cash deposits):
· explain three (3) features
· describe the process for investing
· identify the expenses involved.
Description / MarksExplains the features of each investment option (shares, property and cash deposits)
Note: Maximum of 3 marks for each investment option / 1–9
(1 per feature)
Answer could include, but is not limited to:
Features of shares
· certificates bought and sold on the stock exchange through brokers
· have a face or nominal value
· provide a stake in the profits of the company during its life and in the assets of the company when it is wound up
· usually provide dividends (share of profits) two times per year
· share value may increase or decrease in value over time
Features of property
· large amounts of money are involved
· provide ongoing returns if rental properties
· generally increase in value over time
Features of cash deposits
· small amounts may be invested
· provide ongoing returns in the form of interest
· easy access to funds – no waiting periods
· retain face value, but may lose nominal value
Note: a duplicate feature for a particular investment option does not receive a second mark.
Description / Marks
Describes the process for investing in each option
Note: Maximum of marks each for the process / 2
States a fact about the process for investing in each / 1
Total / 6
Answer could include, but is not limited to:
Process for investing in shares
· usually through an external party, a stockbroker, or may be made individually
Process for investing in property
· usually through an estate agent
Process for investing in cash deposits
· by depositing funds with the financial institution
Note: a duplicate process for a particular investment option does not receive a second mark.
Description / Marks
Identifies the major expenses relating to each investment option / 1–3
(1 per expense)
Answer could include, but is not limited to:
Expenses relating to shares
· brokerage charge is added to the cost of the shares
Expenses relating to property
· stamp duty is added to the price of the property when purchasing
Expenses relating to cash deposits
· generally there are no expenses relating to making cash deposits
Note: a duplicate process for a particular investment option does not receive a second mark.
2. Explain the concepts of risk and return and apply these concepts to each of these
investment options.
Explains the concept of risk / 1
Explains the concept of return / 1
Explains risk and return for each investment option
Note: Maximum of 2 marks for each investment option / 1–6
(1 mark each)
Total / 8
Answer could include, but is not limited to:
Risk
· the chance an investment won't give you the outcomes you want compared to the outlay made
· the chance that the amount earned (the return) on the investment is higher or lower than expected
Return
· the gain or loss generated on an
investment relative to the amount of money invested and usually expressed as a percentage
· how much is earned on the investment itself (capital invested) and the ongoing profits the investment generates
· generally, the larger the potential investment return, the higher the investment risk and vice versa
Application of the concepts to shares
· share prices are determined by the forces of supply and demand and the company’s future earnings prospects. Earnings will determine the value of a share and any changes in forecast earnings, either by company management or by market analysts, will impact on the share price and the return on the share. Shares attract a potential high degree of risk and high rate of return.
Application of the concepts to property
· property investments have a higher risk than fixed interest but less than equities (shares).They can provide tax-advantaged income from rent received and can include capital growth. The risk is moderate to high, as is the return.
Application of the concepts to cash deposits
· cash deposits are considered to be lowest level of risk and have the lowest rate of return. The investment provides interest only, (usually a moderate interest) and the investment value may not keep up with inflation.
Note: a duplicate explanation of risk or return for a particular investment option does not receive a second mark.
3. a) For each of these investment options, identify two (2) advantages and two (2) disadvantages.
b) Which of these investment options would you choose? Provide three (3) reasons to justify your choice.
Description / MarksIdentifies two advantages of each of the three investment options / 1–6
(1 per advantage)
Identifies two disadvantages of each of the three investment options / 1–6
(1 per disadvantage)
Total / 12
Answer could include, but is not limited to any two of the following for each investment option:
Advantages of shares
· ongoing profits - trends show that generally shares return annual profits (dividends)
· shareholders aren’t responsible for the company’s actions, and can’t be held liable legally for those actions
· the shares themselves can be sold on to others which is a very simple process – brokerage fee applies
Advantages of property
· property has a physical, tangible quality
· property is durable
· contributed by partners
Advantages of cash deposits
· can be set up without a third party
· ability to raise capital through shares
Disadvantages of shares
· value is on paper, the share certificate itself doesn’t have value
· the company directors may decide not to declare dividends (profits) so there is no ongoing return
· shareholders aren’t able to make decisions on behalf of the company
Disadvantages of property
· buying property incurs large expenses such as stamp duty
· property may be in an area that is rezoned and loses value
· dependant on selling the property to receive funds
· property may be difficult to sell and investment can’t be cashed at premium prices
· may require repairs and maintenance, otherwise tends to deteriorate and eventually may even fall down
Disadvantages of cash deposits
· generally low interest rates apply
· investment may retain face value but lose real value if the interest rate doesn't keep up with inflation
the institution in which the deposits are made could experience financial difficulty, and funds could be lost
Note: a duplicate advantage or disadvantage for a particular investment option does not receive a second mark.
Description / Marks
Provides three valid reasons for the chosen investment option / 1–6
(2 per reason)
Answer could include, but is not limited to reasons from the following:
Shares
· shares yield dividends on a regular basis
· as a shareholder, your investment is protected because you aren’t responsible for the actions of the company directors
· shareholders not bound by the financial actions/decisions of other shareholders
· because shares themselves don’t have a physical quality, they won’t deteriorate
Property
· the value of property usually increases as time goes on
· repairs to property, if used for rental, are tax deductable items
· property is able to be rented out so it provides ongoing funds
· property can be negatively geared
Cash deposits
· many cash deposits have withdrawal options – investment isn’t tied up for a long length of time
· the cash doesn’t need to be sold to others (like shares or property)
· easy form of investment to enter into
Note: a duplicate reason for a different investment option does not receive a second mark.
4. Explain one (1) factor which would influence your decision to invest individually or with your siblings.
Description / MarksExplains a valid reason for the decision to invest individually or with siblings / 2
States a valid reason for the decision to invest individually or with siblings / 1
Answer could include, but is not limited to reasons from the following:
Individually
· make individual decision about the investment type as it isn’t necessary to consult with the others
· future decisions about the investment, such as duration, cashing in, can be made individually
Siblings
· pooling resources allows for investing in larger types of investment which will provide greater returns
· diversification in investment possible where a variety of investments can be undertaken, increasing the odds of selecting a profitable range of investments
· support from siblings to gain ideas and support for future investment strategies
5. Provide two (2) alternative investment options for the $300,000 (i.e. other than
investing in shares, property, or cash deposits).
Option 1
Explains the alternative investment option for the $300,000 / 2
States a fact about the alternative investment option for the $300,000 / 1
Subtotal / 2
Option 2
Explains the alternative investment option for the $300,000 / 2
States a fact about the alternative investment option for the $300,000 / 1
Subtotal / 2
Total / 4
Answer could include, but is not limited to:
Alternative investment options
· superannuation: money saved for retirement, voluntary extra contributions can be made
· bonds: loans of money to corporate or government entities for a defined period of time at a fixed interest rate
· debentures: long term loans to companies yielding a fixed rate of interest
· private markets: investing in privately owned business
6. Outline two (2) financial institutions other than banks that cater for the financial needs of individuals.
Description / MarksOutlines two financial institutions other than banks / 1–2
(1 mark each)
Answer could include, but is not limited to:
· credit unions: a member-owned financial cooperative that provides a range of financial services such as loans for personal financial use
· retail stores: provide a variety of products for cash or credit that may be purchased physically or online
· telecommunication companies: offer telecommunication products and services that may be purchased physically or online
7. Explain what a financial scam is, and two (2) measures you can take to avoid being
caught up in financial scams.
Explains the concept of a financial scam / 2
States a fact about a financial scam / 1
Subtotal / 2
Measure 1
Explains an appropriate measure to avoid being caught up in financial scams / 2
States an appropriate fact about the measure / 1
Subtotal / 2
Measure 2
Explains an appropriate measure to avoid being caught up in financial scams / 2
States an appropriate fact about the measure / 1
Subtotal / 2
Total / 6
Answer could include, but is not limited to:
Financial scam
· illegally and/or improperly accessing and using a person’s money or other property
· illegal and/or unethical decisions and actions made by people who handle money and other forms of assets on behalf others
Measures to avoid being caught up in financial scams
· do not provide bank account details or account pin numbers in unsecure environments, for example on the phone or online
· research what’s being suggested, for example check with an authorised agency to see whether what is being offered is legitimate
· if you’re unsure don’t give in to peer group pressure to engage in the financial situation
· seek professional advice by consulting a financial adviser before engaging in the financial activity
8. Select a government agency (such as Department of Commerce) and outline its role in relation to personal finance.