HA1022 Principles of Financial Markets: ASSESSMENT CASE STUDY

Work must be carried out in groups of 4 people.

The objective of this assignment is to assess the investment conditions in the Australian economy form Top

Down Fundamental Analysis.

Students should proceed to the Reserve Bank Website:

http://www.rba.gov.au/chart-pack/

From here you can down load graphs of key economic indicators. Then using these graphs analyse the recent

history of the Australian stock market and form a prediction as to the investment conditions in the current

Australian stock market.

The indicators must include the following:

World Economy

      o GDP Growth World

Australian GDP Growth and Inflation

      o Australian GDP Growth

      o Consumer Price Inflation

Interest Rates

      o Australian Bond Yields

Exchange Rates, Australian Dollar vs:

      o US Dollar, Euro and Yen

You should be looking at these indicators and comparing them to what happened to the stock market shortly

after. In your analysis include a definition and/or background information on each indicator that you are

analysing.

At the end of your report state your conclusion as to whether or not your analysis shows that current

investment conditions in the Australian stock market are favourable.

Group Report Required:

Each group should prepare a report of no more than 10 pages outlining the above analysis and the selection of

the resulting portfolio. Marks will be given for content not for length. Anything over 10 pages will not be

marked.

Resources available

You should use the RBA website; this will give you easy access to graphs and reports on the Australian and

world economies. You may also access additional information via the ‘Australian Financial Review’ newspaper

or website, finance.yahoo.com; finance.google.com; Bloomberg.com; ft.com, www.asx.com.au,

www.afr.com.au.