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Evidence Guide: FNSINC601A - Apply economic principles to work in the financial services industry

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

FNSINC601A - Apply economic principles to work in the financial services industry

What evidence can you provide to prove your understanding of each of the following citeria?

Identify economic principles and theories related to financial services functions and tasks

  1. Knowledge of economic principles that apply to the industry is developed and applied
  2. Microeconomic theory of markets and how this influences financial products and services is understood
  3. Capital adequacy regulation and requirements as they apply to work functions are accessed and considered
Knowledge of economic principles that apply to the industry is developed and applied

Completed
Date:

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Microeconomic theory of markets and how this influences financial products and services is understood

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Capital adequacy regulation and requirements as they apply to work functions are accessed and considered

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Evaluate economic aspects that apply to decision making

  1. Relevant financial modelling techniques are applied to economic data to inform decision making
  2. Appropriate asset pricing models and their application are known and used
  3. Models of determining organisational value in relation to capital structure are applied
Relevant financial modelling techniques are applied to economic data to inform decision making

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Appropriate asset pricing models and their application are known and used

Completed
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Teacher:		 Evidence:

 

 

 

 

 

 

 

Models of determining organisational value in relation to capital structure are applied

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Review own work

  1. Own work is evaluated in the context of relevant economic principles
  2. Ways to improve performance through understanding of how economics applies to own decision making are considered
Own work is evaluated in the context of relevant economic principles

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Ways to improve performance through understanding of how economics applies to own decision making are considered

Completed
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Maintain a personal understanding of economic policies

  1. Current economic theories and their impact on the industry are researched to ensure relevant knowledge is current
  2. Contemporary economic principles are integrated into work practices
Current economic theories and their impact on the industry are researched to ensure relevant knowledge is current

Completed
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Contemporary economic principles are integrated into work practices

Completed
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Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

use knowledge of common economic theories that relate to the financial services industry

apply knowledge of microeconomic principles and how they relate to financial services industry products, services and organisational practices

research economic trends and evaluate impacts

access and interpret corporate regulation

use a range of financial modelling techniques and tools

review own performance in applying knowledge of economic principles in day-to-day work functions

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills which may include formal examinations

setting and reviewing workplace projects and business simulations/scenarios.

Guidance information for assessment

Required Skills and Knowledge

Required skills

communication skills to:

determine and confirm work requirements, using questioning and active listening as required

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

well-developed research skills such as:

accessing and managing information

interpreting documentation

coordinating tasks

highly developed numeracy and IT skills including:

identifying and using statistical models

accessing and using identifying and using applicable knowledge systems, spreadsheets and databases

using internet information

recording, gathering and consolidating financial information

problem solving skills to identify any issues that have the potential to impact on work outcomes and to develop options to resolve these issues when they arise

organisational skills, including the ability to plan and sequence work

Required knowledge

economic theories and valuation of assets

financial modelling techniques and tools

industry/company financial markets, products and services

relevant legislation and statutory requirements and industry codes of practice

techniques and tools for evaluation and interpretation of research data

the economic and political climate relating to the financial industry

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Economic principles may include:

the difference between macroeconomics and microeconomics

the difference between normative and positive economics

quantity theory of money

free markets

fiscal and monetary policy, balance of payments, surpluses and deficits

market equilibrium

command and mixed economies

inflation, deflation and stagflation

Gross Domestic Product (GDP)

direct and indirect taxes, subsidies

cause and effect.

Microeconomic theory of markets may include:

monopoly and competition

scarcity

opportunity cost

market failure

resource allocation

fixed and variable costs

average and marginal costs.

Capital adequacy regulation and requirements include:

financial management and disclosure

credit ratings and agencies

capital requirements and capital to assets ratio

unfunded loan commitments, letters of credit, derivatives, hybrid instruments and foreign exchange contracts

arbitrage and hedge funds

value function iteration

Basel accords

role of the Australian Prudential Regulation Authority (APRA)

call reports

margin buying/lending.

Financial modelling techniques include but are not limited to:

Net Present Value (NPV)

break-even analysis

yield curves

forecasting cash inflow and outflow

discounted cash flow

break-even and contribution margin analysis

analysis of segmental performance and profit variance

forecasting with regression and Markov methods

Value at Risk (VaR)

normal and Gaussian distribution

credit scorecards.

Asset pricing models cover:

rate of return

systematic and unsystematic risk

elasticity of demand

interpreting demand curves and diagrams

utility maximisation.

Organisational value may include:

tangible and intangible assets

knowledge assets and intellectual capital

Tier 1 and Tier 2 capital

leverage ratio

stockholder's equity ratio.

Economic theories include but are not limited to:

capitalism

Keynesian economics

post-Keynesian economics

value theory

supply-side economics

monetarism.