Explain the interrelationships of the major domestic and global market sectors
LO2: Explain the role of intermediaries in financial markets
LO3: Assess the changes and impact of key economic and financial indicators on the Australian financial markets
You have been asked by the board to build upon the preliminary work that you performed earlier for James and David; collating those notes into a more thorough briefing pack.
The board is interested in two key areas:
(a) In the context of ECC having to choose between the Indonesian Investment and thus becoming IPC, or the acquisition and thus becoming ECR; discuss the key domestic and global financial drivers applicable to both scenarios, explaining the key interrelationships that exist between domestic and international markets. (10 marks — 600 words)
(b) Given the above response, the board is concerned about recent high growth in Australia and is nervous about any RBA intervention. In the context of the above, comment on how your views in
(a) may change if we start to see the RBA increasing rates steadily over the coming two years.
(5 marks — 300 words)