Sample questions (and answers) for Australian citizenship exams

Sample questions (and answers) for Australian citizenship exams in the federal government's draft Becoming An Australian Citizen workbook:
1. In what year did Federation take place? (1901)
2. Which day of the year is Australia Day? (January 26)
3. Who was the first Prime Minister of Australia? (Edmund Barton)
4. What is the first line of Australia's national anthem? (Australians all let us rejoice)
5. What is the floral emblem of Australia? (Wattle)
6. What is the population of Australia? (approx 21 million)
7. In what city is the Parliament House of the Commonwealth Parliament located? (Canberra)
8. Who is the Queen's representative in Australia? (the governor-general)
9. How are Members of Parliament chosen? (by election)
10. Who do Members of Parliament represent? (the people of their electorate)
11. After a federal election, who forms the new government? (the political party or coalition of parties which wins a majority of seats in the House of Representatives)
12. What are the colours on the Australian flag? (red, white and blue)
13. Who is the head of the Australian Government? (the prime minister)
14. What are the three levels of government in Australia? (Commonwealth, State or Territory and local)
15. In what year did the European settlement of Australia start? (1788)
16. Serving on a jury if required is a responsibility of Australian citizenship: true or false? (true)
17. In Australia, everyone is free to practise the religion of their choice, or practise no religion: true of false? (true)
18. To be elected to the Commonwealth Parliament you must be an Australian citizen: true or false? (true)
19. As an Australian citizen, I have the right to register my baby born overseas as an Australian citizen: true or false? (true)
20. Australian citizens aged 18 years or over are required to enrol on the electoral register: true or false? (true)

Why rich women have sons

Rich, married, well-educated women tend to have more sons, while those who are poorer and unhealthy tend to have more daughters, a study shows.
Put simply, the reason is that women are tougher than men. According to evolutionary theory, women living in poorer communities are predisposed to have daughters to ensure survival of the family line because the men are at greater risk of dying younger.
The US research, published recently in the Proceedings of the Royal Society, looked at a database of 50 million people. It holds a mirror to poor health and education in black America, where black mothers have long had fewer boys than white mothers.
And it has depressing implications for countries such as India and China, where female infanticide occurs, since the findings suggests these countries cannot avoid having an excess of daughters.
The idea has proved true for a range of species, such as insects, birds, pigs, sheep, dogs, mink and deer.
"We find that married, better educated and younger [which is advantageous from a biological perspective] mothers are more likely to bear sons," said Professor Lena Edlund, who co-wrote the study with Professor Douglas Almond, a colleague at Columbia University in New York.
"For instance, relative to a mother with some college education, a mother without a high school degree was approximately 0.6 per cent less likely to bear a boy.
There has been little research in Australia into sex distribution at birth. However, the National Perinatal Statistics Unit at the University of NSW has just started researching the subject. "In Australia we have historically had quite stable ratios, about 106 boys to 100 girls, which is in the normal range," Jishan Dean, the unit's acting director, says.
The research is looking at whether recent migrants from India and China, with their cultural preference for boys, are influencing Australian birth patterns, she says. The researchers will also look at socioeconomic factors.
The US study provides powerful confirmation of an idea set out more than three decades ago by Robert Trivers, an evolutionary biologist, and Dan Willard, a mathematician, who boil life down to one factor - having as many offspring as possible and thus passing on as many genes to future generations as possible.
The Trivers-Willard hypothesis argues that strong, healthy women tend to have sons, ensuring their genes and family line are passed on. These sons, in turn, are strong and outdo other weaker male offspring to reproduce, thus ensuring survival of the fittest and of the family line.
Weaker or poor mothers tend to have weaker sons who do not do well and are more likely to die early - earlier than women in the same society.
To ensure survival of the family line, the women tend to have daughters because they are more likely to survive long enough to become mothers themselves.
Although the results strictly apply to the US, Edlund says that she would expect the effect of a bias towards girls at the bottom social strata to be more pronounced in developing countries because infant mortality is up to 10 times greater than in America.

Buyers beware! Remember '87

No big panic, but I wouldn't be buying yet. Here's why.
I think there is just a chance that we might see some major hedge fund collapse. Moody's has referred to the possibility in the US.
The big redemption date for hedge funds for the third quarter was last Wednesday. They have to collate investor requests to cash in their chips and meet them. We are too close to that date to be counting our chickens on a recovery. If Sentinel, a relatively low- risk money market fund, reported panic selling then what do you think is happening with other more exposed funds? We have yet to find that out.
If the redemptions are big, so the hedge fund selling will be big and the credit crunch will get worse. The abyss is still there. In the face of that I wouldn't start doing acrobatics in case I fell in.
Stocks take three times as long to build confidence as they do to lose it, so there's no real point rushing to buy. The bounce will be slower than the fall. Confidence is severely bruised. Leave the heroics to the traders. Sure there will be some short-term money to be made fluking the bottom but that's not easy, it's not investment and it could kill you.
In the 1987 crash the market lost just 14 months of gains. We have lost six months. If we lost 14 months of gains we would fall to the levels of June last year c another 16 per cent down from here to 4800 on the All Ords. That would make a 25.5 per cent fall. In 1987 the All Ords fell 47.8 per cent (the FTSE fell 36 per cent, the Dow Jones fell 36 per cent, the S&P 500 fell 33 per cent). Don't want to suggest this will happen but there is a remarkable overlap between the profile (not the magnitude) of our performance in the last two years and the performance of the All Ords over the 1987 crash (see chart). This is a log chart, measuring percentage movements of the All Ords now and the All Ords then. Don't get too upset c it's a picture, not a prediction. But it does suggest you stay on the sidelines. On this profile we could fall another 16 per cent - and what other guide do we have?
Some encouragement:
Again, the All Ords has lost only six months of gains. Losing that is not going to halt the economy, kill the housing market or change lives.
The Australian economy will be supported by China growing at 9 per cent until 2015 and probably beyond. No one's mentioned that in the last two weeks. Australia is a great long-term investment opportunity c the international funds will be back.

The massive fall in the Aussie dollar is good in a way. When the dust settles and the international fund managers look up they will see China, Australia and a currency that was on its way to parity that has dropped out of sight on short-term concerns. They will be back.
Since 1989 the stockmarket has fallen more than 10 per cent on 11 occasions and has recovered that fall within five months.
Some of the recent share price falls are just great for people looking to invest (sorry to those of you who have lost money). Maybe you were a bit lazy slotting that $1 million into the equity market having slotted it into the super fund. This is a godsend. You can buy BHP at $33 instead of $39.79, Rio at $83 instead of $105, NAB at $37 instead of $44.70, Leighton Holdings under $40 instead of $47.45. Let alone Macquarie Bank at $67 instead of $98.64 and Babcock & Brown at $19 instead of $34.78. A delicatessen of cheaper stocks.
The game now is to build a long-term investment portfolio and to do that you need to focus on the stocks not the market. Target a few stocks, target prices you'd like to buy them at.
Signs of the bottom:
¡ Macquarie Bank and Babcock & Brown go up.
¡ You hear broker research talking about value instead of the market.
¡ You hear strategists discussing price-earnings ratios being below the historic average.
¡ The Australian dollar starts going up. This will drag international institutions back into the market. They are the first to exit and will be the first to return when the currency rights itself.
Stocks to buy after the crash:
¡ Foster's - more drinking;
¡ Fleetwood - more caravans;
¡ Babcock & Brown Communities - early retirement.

It's time to rejig your portfolio

It's a question that has been on many investors' minds since the stock market hit the skids two weeks ago: should portfolios be rejigged in light of rising market volatility?
On the one hand, the current sell-off, prompted by fears over a credit crunch stemming from troubles in the mortgage market, has already shaved around 800 points off the Dow Jones industrial average. And history has shown that whenever stocks start to have major one-day swings after a prolonged period of calm, it is typically a sign that "we've opened Pandora's box of volatility", said Sam Stovall, chief investment strategist at Standard & Poor's.
On the other hand, this is the fourth spike in stockmarket volatility in a little more than a year - the last one began at the end of February. In the three previous cases, the market's roller-coaster ride, while frightening, proved rather short. So this might not be the best time to drastically overhaul your asset allocation strategy by reducing your exposure to stocks.
But when it comes to managing your portfolio, you don't have to make major long-term adjustments to your mix of stocks and bonds to dampen the gyrations in your investments. Sometimes, all it takes is a periodic rebalancing of your portfolio, back to your desired mix of stocks and fixed-income investments, to smooth out the bumps.
To be sure, making a major and permanent shift to a much more conservative asset allocation strategy can make a real difference in your overall risk profile.
For instance, over the last half-century, the worst one-year stretch for an American investor's portfolio of 60 per cent stocks, 30 per cent bonds and 10 per cent cash investments was a loss of 24.1 per cent. That occurred in the 12 months that ended in September 1974.
By comparison, the worst one-year loss for a more conservative US mix - 40 per cent stocks, 40 per cent bonds and 20 per cent cash - was just 15.5 per cent during the same period.
Yet to achieve this lower risk, you would have to give up a decent amount of gains. In this case, the switch in asset allocation strategy would have reduced your average annual returns to 8.3 per cent from 9.2 per cent.
For some investors, that may be too significant a loss of potential returns to consider.
So the asset manager T. Rowe Price recently posed a different question. Can you significantly reduce your exposure to risk simply by rebalancing your portfolio once a year, rather than permanently reducing your exposure to stocks for the long run?

The answer turns out to be yes.
Say you started investing at the end of 1984, in a portfolio consisting of 60 per cent stocks, 30 per cent bonds and 10 per cent cash. And further assume that you never rebalanced this portfolio back to that 60-30-10 ratio. Instead, you did what a surprisingly large percentage of individual investors do: you let the market take your investments for a ride.
By the end of June, this strategy would have earned an average annual gain of 11.1 per cent since 1984. Now, had you started in 1984 with the same strategy, but this time rebalanced your portfolio annually, you would have earned nearly as much on your investments: 10.7 per cent a year, on average.
But at the same time, that portfolio would have been 18 per cent less volatile, based on standard deviation, according to T. Rowe Price. The buffering effect of rebalancing might have been enough to let you sleep better at night.
Unfortunately, a vast majority of individual investors fail to take that simple step. Only 18 per cent of workers who invested in a retirement plan rebalanced their portfolios last year, a study by the employee benefit research firm Hewitt Associates, shows.
The fact is, whether or not you tweak your mix of stocks and bonds, the market will do it for you - though maybe in a way you won't like. Over the long term, stocks tend to outperform bonds. So "if you rely on inertia and don't rebalance regularly, over the long run, you're going to end up with a bigger allocation to stocks than you started with", said Christine Fahlund, a senior financial planner at T. Rowe Price in Baltimore.
But rebalancing is not just about resetting your mix of stocks and bonds. You should also consider periodically resetting the types of stocks you own.
For instance, Mr Stovall notes that over the last five years, many of the best-performing areas of the stockmarket have also been among the most volatile.
Those include the basic materials, telecommunications and technology sectors, all of which have a "beta" of more than 1.0. (Beta measures the tendency of an investment to go up or down, relative to the market - in this case the S.& P. 500-stock index. So a beta of more than 1 implies that if the S.& P. 500 were to rise or fall 5 per cent, for example, that investment would rise or fall even further.)
On the other hand, two of the lowest beta sectors in the market - health care stocks, with a beta of 0.6, and consumer staples stocks, at 0.5 - have been the market's worst performers over the past five years.

One way that investors might consider rebalancing the stock portion of their portfolios is to "gravitate toward areas with lower volatility, like health care and consumer staples, while avoiding those highly volatile areas that have already done exceptionally well," Mr Stovall said.
Jeffrey Kleintop, chief market strategist at LPL Financial Services in Boston, said that another way to rebalance - without selling any holdings - is simply to take your new money and invest it in areas that many investors have ignored in recent years, like large-capitalisation domestic growth stocks and stock funds. These may be worth buying now.
While many people associate large-cap growth stocks with technology, these equities can also be found in the health care and industrial sectors, both of which have a beta of less than 1.
The notion of buying stocks amid a market storm may seem unappetising. And some investors may decide simply to wait to see whether this is a short-term sell-off or the start of a real correction.
But keep in mind that if you have not rebalanced your portfolio for several years, chances are that you probably have more equity exposure than you intend. Moreover, you are probably overexposed to the most volatile types of stocks. So some rebalancing may be better than no action at all.