STUDENT ASSESSMENT BOOKLET
FNSINC601 APPLY ECONOMIC PRINCIPLES TO WORK IN THE FINANCIAL SERVICES INDUSTRY
Contents
Assessment overview 4
Assessment plan 5
Assessment Task Cover Sheet – Assessment Task 1 7
Assessment Task 1: Written questions 9
Assessment Task Cover Sheet – Assessment Task 2 13
Assessment Task 2: Economic principles and theories project 15
Assessment Task Cover Sheet – Assessment Task 3 17
Assessment Task 3: Capital investment evaluation project 19
Assessment overview
This Student Assessment Booklet includes all your tasks for assessment of FNSINC601 Apply economic principles to work in the financial services industry.
About your assessments
This unit requires that you complete 3 assessment tasks. You must complete all tasks to achieve competency for this unit.
Assessment Task Assessment method Overview
Assessment Task 1: Written Questions Questioning You must correctly answer all questions in this task to show that you understand the knowledge required of this unit.
Assessment Task 2: Economic principles and theories project Project You must develop a report to assist a client with their decision-making, as well as develop a reflection report about the use of economic principles and theories.
Assessment Task 3: Capital investment evaluation project Project You must review information provided to assist a company to make a decision on a capital investment project.
How to submit your assessments
When you have completed each assessment task you will need to submit it to your assessor.
Instructions about submission can be found at the beginning of each assessment task.
Make sure you photocopy your written activities before you submit them – your assessor will put the documents you submit into your student file. These will not be returned to you.
Assessment Task Cover Sheet
At the beginning of each task in this booklet, you will find an Assessment Task Cover Sheet. Please fill it in for each task where you need to submit items for assessment, making sure you sign the student declaration.
Your assessor will give you feedback about how well you went in each task, and will write this on the back of the Task Cover Sheet.
Assessment appeals
You can make an appeal about an assessment decision by putting it in writing and sending it to us. Refer to your Student Handbook for more information about our appeals process.
Assessment plan
The following outlines the requirements of your final assessment for this unit. You are required to complete all tasks to demonstrate competency for the unit.
Your assessor will provide you with the due dates for each assessment task. Write them in the table below.
Assessment Requirements Due date
1. Written Questions
2. Economic principles and theories project
3. Capital investment evaluation project
AGREEMENT BY THE STUDENT
Read through the assessments in this booklet before you fill out and sign the agreement below. Make sure you sign this before you start any of your assessments.
Have you read and understood what is required of you in terms of assessment? • Yes • No
Have you read and understood the RTO’s policies and procedures related to reassessment? • Yes • No
Do you understand the requirements of this assessment? • Yes • No
Do you agree to the way in which you are being assessed? • Yes • No
Do you have any special needs or considerations to be made for this assessment? If yes, what are they?
• Yes • No
Do you understand your rights to appeal the decisions made in an assessment? • Yes • No
Student name:
Student signature: Date:
Assessor name:
Assessor signature: Date:
Assessment Task Cover Sheet – Assessment Task 1
Students: Please fill out this cover sheet clearly and accurately. Make sure you have kept a copy of your work.
Name:
Date of submission:
Unit: FNSINC601 Apply economic principles to work in the financial services industry
Assessor to complete
Assessment Task Satisfactory/
Not satisfactory Date Was this a resubmission? Y/N
Written questions
STUDENT DECLARATION
I declare that these tasks are my own work.
þ None of this work has been completed by any other person.
þ I have not cheated or plagiarised the work or colluded with any other student/s.
þ I have correctly referenced all resources and reference texts throughout these assessment tasks.
þ I understand that if I am found to be in breach of policy, disciplinary action may be taken against me.
Student signature:
Student name:
ASSESSOR FEEDBACK
Assessors: Please return this cover sheet to the student with assessment results and feedback.
A copy must be supplied to the office and kept in the student’s file with the evidence.
Assessor signature:
Assessor name:
Date:
Assessment Task 1: Written questions
TASK SUMMARY
You are to answer all written questions.
WHAT DO YOU NEED IN ORDER TO COMPLETE THIS TASK?
Resources
? Access to textbooks and other learning materials
? Access to a computer, printer, Internet and email software (if required)
? Access to Microsoft Word or similar program
WHEN AND WHERE DO I NEED TO COMPLETE THIS TASK?
? This task may be done in your own time as homework or you may be given time to do this task in class (where applicable).
? Your assessor will provide you with the due date for this assessment.
WHAT DO I NEED TO DO IF I GET SOMETHING WRONG?
If your assessor marks any of your answers as incorrect, they will talk to you about resubmission. You will need to do one of the following:
? Answer the questions that were incorrect in writing.
? Answer the questions that were incorrect verbally.
INSTRUCTIONS
? This is an open book test – you can use your learning materials as reference.
? You must answer all questions in this task correctly.
? You must answer the questions by typing your answers in Microsoft Word or a similar program – your assessor will advise as to whether you must email them your completed assessment, submit the file on a USB drive or hand in a hard copy.
? If there are tables included in your task that you need to fill out, you may choose to recreate them in a word processing application. If you have been provided with an electronic version of this booklet, you may prefer to type your answers directly into the document.
WRITTEN ANSWER QUESTION GUIDANCE
The following written questions may use a range of ‘instructional words’, such as ‘identify’ or ‘explain’. These words will guide you as to how you should answer the question. Some questions will also tell you how many answers you need to give – for example, ‘Describe three strategies…’.
? Describe – when a question asks you to ‘describe’, you will need to state the most noticeable qualities or features. Generally, you are expected to write a response of two or three sentences in length.
? Explain – when a question asks you to ‘explain’, you will need to make clear how or why something happened or the way it is. Generally, you are expected to write a response of two or three sentences in length.
? List – when a question asks you to ‘list’, this means you will need to briefly state information in a list format, often with a specific number of items indicated.
? Outline – when a question asks you to ‘outline’, this means giving only the main points. Generally, you are expected to write a response of two or three sentences in length.
QUESTION 1
Explain the key premises of laissez faire economics.
QUESTION 2
Explain the key premise of Keynesian economics.
QUESTION 3
Outline the concept of opportunity cost as an assumption in the study of economics. Provide a relevant example that shows the practical application of this concept.
QUESTION 4
Explain capital adequacy requirements in Australia and describe capital adequacy requirements for one type of financial services institution.
QUESTION 5
Outline two key determinants of demand and explain the circumstance that would cause the demand curve to shift, giving an example to illustrate your answer.
QUESTION 6
Explain the capital assets pricing model and its key use.
QUESTION 7
Explain the Arbitrage pricing model and its key uses.
QUESTION 8
Explain the importance of Tobin’s investment theory and its key premise.
QUESTION 9
Explain the term Net Present Value and its use as a financial model.
QUESTION 10
Describe the basic structure and operation of four of the main types of institutions that operate within the Australian financial services industry. Include the government institution that is responsible for supervising and/or regulating each type of institution.
QUESTION 11
Explain the definition of a financial service as set out in the Corporations Act 2001, and in which section of the act is this listed?
QUESTION 12
Explain the definition of a financial product as set out in the Corporations Act 2001, and in which section of the act is this listed?
QUESTION 13
Outline the primary responsibility of the Australian Competition and Consumer Commission.
QUESTION 14
List the five key areas in which the Australian Consumer Law offers protection to consumers.
QUESTION 15
Briefly explain the general intent of the Privacy Act 1988.
QUESTION 16
Briefly explain the purpose of the Australian Privacy Principles and who must follow these principles.
QUESTION 17
Explain the key obligations of a credit provider under the National Credit Act.
QUESTION 18
Explain the key requirements of the Financial Transaction Reports Act for an accountant who meets the definition of a cash dealer.
QUESTION 19
Explain the importance of valid and reliable research data.
QUESTION 20
Explain the term standard deviation in relation to analysing research data.
QUESTION 21
Explain the use of correlation analysis in research.
QUESTION 22
Describe how the economic climate influences financial services industry.
QUESTION 23
Describe how the political climate influences the financial services industry.
WHAT MUST BE SUBMITTED FOR TASK 1:
• Your answers to each question.
Assessment Task Cover Sheet – Assessment Task 2
Students: Please fill out this cover sheet clearly and accurately. Make sure you have kept a copy of your work.
Name:
Date of submission:
Unit: FNSINC601 Apply economic principles to work in the financial services industry
Assessor to complete
Assessment Task Satisfactory/
Not satisfactory Date Was this a resubmission? Y/N
Economic principles and theories project
STUDENT DECLARATION
I declare that these tasks are my own work.
þ None of this work has been completed by any other person.
þ I have not cheated or plagiarised the work or colluded with any other student/s.
þ I have correctly referenced all resources and reference texts throughout these assessment tasks.
þ I understand that if I am found to be in breach of policy, disciplinary action may be taken against me.
Student signature:
Student name:
ASSESSOR FEEDBACK
Assessors: Please return this cover sheet to the student with assessment results and feedback.
A copy must be supplied to the office and kept in the student’s file with the evidence.
Assessor signature:
Assessor name:
Date:
Assessment Task 2: Economic principles and theories project
TASK SUMMARY
For this assessment task, you are required to apply you understanding of economic principles and theories and decision making for a client and to develop a reflection report about the use of economic principles and theories.
WHAT DO YOU NEED IN ORDER TO COMPLETE THIS PART?
Resources
? Access to textbooks and other learning materials
? Access to a computer, printer, Internet and email software (if required)
? Access to Microsoft Word or similar program
Template
? Economic Report Template
The template listed above has been provided as a Microsoft Word document. Keep a copy of the original file as a master.
WHEN AND WHERE WILL THIS TASK BE COMPLETED?
You will do this task in a simulated workplace environment.
WHAT DO I NEED TO DO IF I GET SOMETHING WRONG?
If you submit work that is not satisfactory, your assessor will provide written feedback explaining why, as well as timelines for resubmission.
Instructions for Task 2
Review the following information:
You are an Accountant with Aus Accountants and you have been asked to prepare a report for the CEO to assist the company in understanding supply and demand factors, so that they can more easily determine the impact movements in price will have on their services.
In addition, the CEO has advised you that he is considering establishing another business specialising in financial planning services and products and would like you to provide advice in report on other supply and demand factors specific to financial products and services.
Now complete the following activities:
1. Develop an economic report
Based on the case study information provided, develop an economic report for the company that addresses the following:
? A summary of the key determinants of supply and demand and factors specific to financial products and services
? An explanation of the concept of market equilibrium and equilibrium price
? An explanation of how changes in supply and demand affect equilibrium for the company’s current services
? An explanation of the price elasticity of demand, and to what extent this affects the services sold by the company and the proposed business offerings.
? A discussion of how the structure of the market in which the firm currently operates affects profitability and whether this differs or not for the proposed business.
? External economic factors that may affect profitability.
Your report must be professionally presented and address all of the above requirements, as well as be written in clear and concise English and be error free.
As a guide, your report should be between two and three pages long.
Use the Economic Report Template to guide your work.
2. Write a reflection report
The next part of the assessment requires you to develop a short reflection report on the following:
? A discussion on how knowledge of economic theories and principles assists the work of an accountant.
? An outline of at least three economic trends relevant to the work of an accountant and their impact.
? An outline of at least two corporate regulations and their impact on businesses.
? An explanation of how you have improved your performance through understanding of how economics applies to own decision making
Your report must be professionally presented and address all of the above requirements, as well as be written in clear and concise English and be error free.
As a guide, it should be approximately 1 to 2 pages long.
3. Write an email to the Senior Management team (your assessor).
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style. It should include a short summary of the purpose and the contents of the attachments.
Attach your economic report and your reflection reports to the email.
WHAT MUST BE SUBMITTED FOR TASK 2?
• Email with economic report and reflection report attached
Assessment Task Cover Sheet – Assessment Task 3
Students: Please fill out this cover sheet clearly and accurately. Make sure you have kept a copy of your work.
Name:
Date of submission:
Unit: FNSINC601 Apply economic principles to work in the financial services industry
Assessor to complete
Assessment Task Satisfactory/
Not satisfactory Date Was this a resubmission? Y/N
Capital investment evaluation project
STUDENT DECLARATION
I declare that these tasks are my own work.
þ None of this work has been completed by any other person.
þ I have not cheated or plagiarised the work or colluded with any other student/s.
þ I have correctly referenced all resources and reference texts throughout these assessment tasks.
þ I understand that if I am found to be in breach of policy, disciplinary action may be taken against me.
Student signature:
Student name:
ASSESSOR FEEDBACK
Assessors: Please return this cover sheet to the student with assessment results and feedback.
A copy must be supplied to the office and kept in the student’s file with the evidence.
Assessor signature:
Assessor name:
Date:
Assessment Task 3: Capital investment evaluation project
TASK SUMMARY
In this assessment task, you are required to analyse and report on economic data to assist a company to make a decision about a capital investment.
WHAT DO YOU NEED IN ORDER TO COMPLETE THIS PART?
Resources
? Access to textbooks and other learning materials
? Access to a computer, printer, Internet and email software (if required)
? Access to Microsoft Word or similar program
Templates
? Capital Investment Report Template
? Debt Financing Report Template
All templates listed above have been provided as Microsoft Word documents. Keep a copy of the original files as masters.
WHEN AND WHERE WILL THIS TASK BE COMPLETED?
You will do this task in a simulated workplace environment.
WHAT DO I NEED TO DO IF I GET SOMETHING WRONG?
If you submit work that is not satisfactory, your assessor will provide written feedback explaining why, as well as timelines for resubmission.
Instructions for Task 3
Carefully review the following information:
As the accountant for Grow Management Consultants, you have been asked to assist the company in making a decision about a $16 million investment in a capital investment project.
The company plans to develop a new customer relationship management system, based on feedback from their clients regarding gaps in existing systems.
The company has provided you with the following information based on preliminary forecasts they have made on annual profits (plus a loss in the first year) and annual cash flow.
Year Profit/Loss Cash Flow
1 Loss $4m Cash flow at year-end ($2m)
2 Profit $4m Cash flow at year-end ($2m)
3 Profit $4m Cash flow at year-end ($6m)
4 Profit $4m Cash flow at year-end ($10m)
Additional information: Residual value at the end of year 4 is expected to be nil. The cost of capital for the company is estimated as 6%.
Based on the information above, the company wished you to complete a number of calculations to advise on the feasibility of the project.
Complete the following activities:
1. Write a capital investment report.
Your report should be professionally presented, be written in clear and concise English and be error free. As a guide, your report should be about one-page long.
To complete the report, you will need to calculate the following:
? Accounting rate of return on average investment, including an explanation of the purpose of this form of asset pricing model and the advantages and disadvantages of this model.
? Accounting rate of return on total investment including an explanation of the purpose of this form of asset pricing model and the difference between this model and the accounting rate of return on total investment.
? Payback period and the purpose of the method of project evaluation and its main features.
? Net Present Value, including an outline of the purpose of using this method
Use the Capital Investment Report Template to guide your work.
2. Write a debt financing report
Assume that the company has now come back to you for guidance on financing the investment project, and the best way of financing the debt.
As a guide, this report should be about two pages long.
It would also like guidance on its current situation in terms of debt and equity finance. The company’s current share value is $4.00 and a total of 2,500,000 shares have been issued.
The value of debt on the balance sheet is shown as $4,000,000 and the cash holding of the company are $350,000.
Include in your report the following:
? Difference between debt and equity financing
? Description of three types of debt finance and three types of equity finance
? Discussion of the importance of capital structuring.
? Leverage ratio based on information provided and interpretation of the leverage ratio.
? Recommended solution for financing of the new investment.
Use the Debt Financing Report Template to guide your work.
3. Write an email to the Senior Management team of Grow Management Consultants (your assessor).
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style. It should include a short summary of the purpose and the contents of the attachments.
Attach your capital investments report and debt financing report to the email.
WHAT MUST BE SUBMITTED FOR TASK 3?
• Email with capital investment report and debt financing report attached
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