Aotearoa New Zealand: Financial Markets Assessment 1 (FSC521): Comprehensive

This post covers Aotearoa New Zealand, as detailed below.

FSC521 Assessment 1

Weighting  – 35%

Learning outcomes

LO3 – Describe financial markets and systems, including the specific roles of key market participants.

LO4 – Analyse how key factors in the economic environment impact participants in the financial services sector.

Instructions

Complete and submit your assessment according to the Open Polytechnic’s Assessments webpage. This includes information on academic integrity, formatting, word limits and referencing.

• Include your name, student number and the assessment number.
• Number your pages.
• Challenge and self-check your responses against the task instructions and the marking schedule. 

Submission

• Submit your assessment in one
• Submit your work through your iQualify course.
• Emailed assessments will not be accepted.
• You will receive an automated notice advising you of your successful submission.

By submitting your assessment, you confirm that it is your own, original work.

Note: For all tasks, include sources or references where relevant. Your responses must be clearly labelled and numbered, client-friendly and professionally presented. Your responses must also show that you have considered the specific details of each client’s situation.

Task 1: The insurance sector and the reinsurance market

Part a. Broker role and regulatory protections

You are an insurance broker. A prospective client calls you and asks the following questions.

• “I see you are an insurance broker. What does that mean?”
• “How do I know it’s okay to use you?”

Write a brief response to the prospective client that explains the following.

i. Your role as an insurance broker.

(4 marks)

ii. Regulation and enforcement that relates to you as a financial advisor and Aotearoa Insurance under the Financial Markets Conduct Act 2013.

(6 marks)
(Word count guideline: 200 words)

(Task 1a total: 10 marks)

Part b. Reinsurance, premium impacts, and benefits

Jackie is one of your clients. She emails you to renew the sum insured on her home. The premium you quote is higher than expected. You explain to Jackie that this is due to an increase in the severity and frequency of natural disasters in Aotearoa New Zealand and overseas. Jackie asks why overseas natural disasters affect her house insurance premium.  Write a response to Jackie that explains the following.

i. The difference between an insurer and a reinsurer, and how the two roles relate to each other.

(4 marks)

ii. Why overseas natural disasters can contribute to an increase in Jackie’s house insurance premium.

(5 marks)

iii. Two benefits of reinsurance for insurance companies and two benefits for consumers like Jackie.

(6 marks)
(Word count guideline: 300 words)

(Task 1b total: 15 marks)

Task 2: Financial services providers and monetary policy

You are a mortgage adviser. Xin contacts you for help finding a home loan with a bank. She has recently immigrated to Aotearoa New Zealand and wants to understand:

• her lending options
• the regulations that ensure she is treated fairly as a new bank customer
• the stability of financial systems in Aotearoa New Zealand.

You advise Xin that banks are not the only type of financial institution operating in the lending sector, and that different providers are subject to regulatory oversight.

Part a. Regulation and oversight of financial services providers

Write a response to Xin that explains the following.

i. The Twin Peaks Model and how it relates to the regulation and oversight of financial services providers in Aotearoa New Zealand.

(1 marks)

ii. The purpose of the Conduct of Financial Institutions (CoFI) regime, including who it applies to and who is responsible for enforcing and supervising the regime.

(1 marks)

(Word count guideline: 200 words)
(Task 2a total: 10 marks)

Part b. Comparison of home loan providers

Select one of each of the following financial services providers currently operating in Aotearoa New Zealand that can provide a home loan for Xin.

• One
• One building society or credit union.
• One non-bank deposit-taking (NBDT) finance company.

To help Xin compare the three provider types, complete the table below with the following.

i. Financial institution: Identify one suitable provider for each required institution type.

(1 mark)

ii. Ownership structure: Describe the ownership structure of each selected provider.

(1 mark)

iii. Regulation: Explain how each type of financial institution is regulated and identify who regulates it.

(2 marks)

iv. Variable home loan rates: Provide the current variable home loan rates offered by the selected providers.

( 1 mark)

Note: Expand the table to fit the required information.

(Word count guideline: 100 words)
(Task 2b total: 5 marks)

Part c. Inflation, monetary policy, and home loan impacts

One year later, Xin contacts you for further advice. She has read that inflation is currently 6% and is expected to rise to 8–9% in the next six months. A year ago, Xin obtained a $600,000 home loan with:

• 50% on a table loan, with a three-year fixed interest rate of 4%
• 50% on a revolving credit facility.

Write a response to Xin that explains the following.

i. The action that the Reserve Bank of New Zealand (RBNZ) is likely to take in response to rising inflation and explain why the RBNZ would take that action.

(3 marks)

ii. The impact of rising inflation on Xin and her home loan.

(5 marks)

iii. How a mortgage adviser can stay informed about economic factors that influence interest rate movements. Provide one

(2 marks)

(Word count guideline: 200 words)

(Task 2c total: 10 marks)  

Task 3: Investment markets and the impact of recession

You are an investment adviser. Sanjay has received a $100,000 inheritance and wants advice on developing a diversified investment portfolio.

He has already placed $25,000 on a six-month term deposit with his bank. He wants advice on how to invest the remaining $75,000. Sanjay has asked you to explain:

• how his term deposit is protected
• how he could invest in the property, equity and debt markets to spread his risk.

Sanjay does not want to invest in a property syndicate because he wants diversification in his investments and does not want direct ownership.

Part A: Investment market explanations and recommendations

Write a response to Sanjay that addresses the following.

i. Explain the scheme that protects Sanjay’s term deposit, including any limitations that apply.

(2 marks)

ii. Recommend the most suitable way for Sanjay to invest $25,000 in the property market without direct ownership. Provide two reasons to support your recommendation.

(4 marks)

iii. Explain the following.

• Two key characteristics of money markets.
• One related investment risk of money markets.
• Two key characteristics of capital markets.
• One related investment risk of capital markets.

(4 marks)

Sanjay wants to invest $25,000 in a start-up company called Wholesale Foods Ltd. He also wants to purchase $25,000 worth of government bonds from an investor who bought the bonds when they were first issued and now wants to sell them.

Sanjay is interested in understanding more about the broader markets for these types of investments, including how the markets are organised and how they operate.

iv. Explain the following.

• The difference between primary and secondary markets.
• The difference between over-the-counter (OTC) trading and exchange trading.
• For Sanjay’s proposed investment in Wholesale Foods Ltd, identify the relevant market, whether it is debt or equity, and any platform or process that may apply.
• For Sanjay’s proposed purchase of government bonds, identify the relevant market, whether it is debt or equity, and any platform or process that may apply.

(8 marks)

v. Explain whether Sanjay can personally buy and sell securities directly on the NZX and provide one example of how he can start buying and selling listed securities.

(2 marks)
(Word count guideline: 400 words)

(Task 3 Part A total: 20 marks)

Part B: Recession impacts on Sanjay’s investment portfolio

Based on your advice, Sanjay diversified his portfolio by purchasing:

• $25,000 in Real Estate Investment Trust (REIT) units
• $25,000 in Wholesale Foods Ltd shares
• $25,000 in government bonds.

Two years later, the Aotearoa New Zealand economy has slowed and is now in recession.

Write a response to Sanjay that addresses the following.

i. Describe three characteristics of a recession.

(3 marks)

ii. Describe the primary impacts of a recession on the equity market and the debt market.

(2 marks)

iii. Explain how the primary impacts are likely to affect the performance of Sanjay’s Wholesale Foods Ltd shares and government bonds.

(3 marks)

iv. Identify whether the debt market or equity market is likely to perform better during a recession and explain why.

(2 marks)
(Word count guideline: 200 words)

(Task 3 Part B total: 10 marks)

Task 4: The tax system and fiscal policy

Taika is a self-employed sole trader. He has estimated his income after expenses for the year ending 31 March 2026 at $120,000. He also received:

• $3500 annual return on his KiwiSaver default fund (he makes voluntary payments)
• $1200 interest on his Supersaver account at Aotearoa Bank.

Taika owns his own home. During the last tax year, he paid:

• $18,000 in mortgage interest to Aotearoa Bank
• $5000 as a lump sum mortgage repayment
• $3500 for home and contents insurance
• $750 for vehicle insurance
• $240 for term life insurance.

All insurance policies are with Aotearoa Insurance.

Part A: Tax treatment of income and payments

Complete the following tasks in accordance with the Aotearoa New Zealand tax system.

i. Calculate the total annual tax on Taika’s $120,000 income for the year ending 31 March 2026. Ignore the ACC earners’ levy.

Note: Show all workings or provide a screenshot of the calculator used.

(4 marks)

ii. Other than Taika’s self-employed income, identify:

• the income that is subject to tax
• the type of tax
• the rate at which the tax should be deducted
• who collects the tax and submits it to the Inland Revenue Department.

(3 marks)

iii. Identify which of Taika’s payments include a tax component, and for each payment, identify:

• the type of tax
• the rate at which tax should be charged or deducted
• who collects the tax and submits it to Inland Revenue.

Note: You do not need to calculate the actual dollar amounts for task ii and task iii.

(3 marks)
(Word count guideline: 200 words)

(Task 4 Part A total: 10 marks)

Part B: Fiscal policy and personal impact

Economists are concerned that household debt is increasing rapidly and the economy is overheating. There are signs that the New Zealand Government may use fiscal policy tools to cool the economy.

Write a response that addresses the following.

i. Identify the phase in the business cycle that the country would be experiencing if the economy were overheating and describe three characteristics of this phase.

(3 marks)

ii. Identify one fiscal policy change the Government could make to cool the economy and explain what the Government aims to achieve by taking this action.

(4 marks)

iii. Using what you know about Taika’s earnings and outgoings, describe how he could be personally affected by the fiscal policy change you have identified.

(3 marks)
(Word count guideline: 300 words)

(Task 4 Part B total: 10 marks)

The post FSC521 The Financial Services Industry Assessment 1, 2026 | Open Polytechnic appeared first on NZ Assignment Help.

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