Assignment

Assignment requirements: A great number of individual investors are now considering investing in securities available through a stock exchange. There are stock exchanges in many countries around the world such as the United States, Japan, New Zealand and Australia. For the purposes of this assignment we will concentrate only on the Australian Securities Exchange or ASX, as it is commonly known. Four securities/financial assets traded on the ASX are ordinary shares, preference shares, convertible notes and rights. Your task is to research (using books, articles, the Internet, the Australian Financial Review newspaper etc.) and answer the following questions. You might start your research by looking at the Market Wrap section of the Australian Financial Review newspaper and the ASX website www.asx.com.au Your task is to answer the following four (4) discussion points: 1. Identify FOUR separate companies, that is, one company whose ordinary shares, one company whose preference shares, one company whose convertible notes and one company whose rights an individual investor can purchase on the ASX. (Please make sure they are different companies). For each company briefly explain the type of business it conducts, what industry it is in and the ASX code. (Note: Companies that have issued Convertible Notes and Preference Shares (Hybrid Securities) can be found in the “Interest Rate Securities” table in the Market Wrap section of the Australian Financial Review newspaper. Similarly companies making a rights issue are in the “Issues Pending” table. You need to buy MONDAY’S newspaper) ( 6 MARKS) 2. Discuss, in detail, the characteristics of each of the FOUR types of securities mentioned in the assignment requirements above. ( 8 MARKS ) 3. Is there any chance that an investor might lose their entire investment in any or all of these securities? In the unfortunate event of the company going bankrupt, identify the relative order or ranking (of each of the four types of securities) of a possible return of some capital or money to an investor. Justify your answer and identify your source. (4 MARKS) 4. Discuss in detail the main factors that need to be considered by an investor when choosing an investment. If you had 5,000 Australian dollars to invest in any of the above four securities from discussion point 2, which security would you buy if you wanted to resell in one month, if any? Justify the choice you have made and include in your answer why you did not choose the other securities.