Hong Kong College of Technology

Centre of International Education

Group Assignment

Programme Title: Higher Diploma in Building Technology Year 2

– HDPBUTECY2 (S1-16/17)

Subject: ECONOMICS AND FINANCIAL MANAGEMENT

Date: SUBMISSION DEADLINE: 6 DECEMBER 2016 (TUE)

(Students are require to form a group of 3-5 students to complete this Group Assignment)

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Student declaration:

I declare that:

i. I understand what is meant by plagiarism.

ii. The implication of plagiarism has been explained to me by my institution.
iii. This assignment is all my own work and I have acknowledged any use of the
published and unpublished works of other people.

Student’s signature:……………………………. Date:………………………

Total number of pages including this cover page

Submission Date Due Date 6 Dec 2016
Students’ ID Class Code
Student’s Full Name
Lecturer’s Name

OFFICIAL USE ONLY

Marker’s comments

Marker’s name: Initial marks awarded /100

Penalty on late submission
Penalty for plagiarism
Final marks awarded /100

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ANSWER ALL QUESTIONS

QUESTION ONE [Total 50 marks]

To examine the usefulness and limits of measures of GDP. We often have difficulty
accepting the use of GDP as a proxy for well-being. Per capita GDP does not directly
measure well-being but it is highly correlated with direct measures. Making this
correlation explicit helps students understand the emphasis on GDP in
macroeconomics.

Instructions:
1. If GDP is a good measure of well-being, why is Switzerland’s GDP so much lower than
India’s GDP or China’s GDP? (20 marks)

2. What measures would be better to compare the well-being of different countries?

(10 marks)

3. How do you expect these direct measures to correlate with per capita GDP?
(20 marks)

QUESTION TWO [ Total 50 marks]

Instructions:

1. Assume you have $100,000 in savings. Create a portfolio of securities worth

$100,000. Decide what financial instruments you would like to use, then find
their current prices in the newspaper. Calculate your holdings of each security
based on current prices. (20 marks)

2. What objectives do you have for this portfolio? Was it chosen to maximize
short-term gains, long-term stability, or some other objective? (10 marks)

3. Explain how each of the following economic events would affect the value of
your portfolio:

i. an increase or decrease in interest rates

ii. a recession
iii. rapid inflation
iv. a depreciation of the U.S. dollar
(20 marks)

(This assignment requires students to use the financial pages of the newspaper to
create their own portfolio.)
END