Modification History
Not applicable.
Unit Descriptor
Unit descriptor |
This unit describes the performance outcomes, skills and knowledge required to apply broad principles of financial economics that underpin a range of tasks and functions in the financial services industry. It includes understanding how financial instruments are priced in markets and techniques and processes government and organisations use to manage financial risk demonstrating broad knowledge of economic theories and related decision-making in a national and organisational economic context. No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement. |
Application of the Unit
Application of the unit |
This unit requires the application of an understanding of economics and how this impacts on work in the financial services industry. It is an underpinning unit for which other skills required for work in the financial services industry are built. It may be applied in all sectors of the industry. |
Licensing/Regulatory Information
Not applicable.
Pre-Requisites
Prerequisite units |
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Employability Skills Information
Employability skills |
This unit contains employability skills. |
Elements and Performance Criteria Pre-Content
Elements describe the essential outcomes of a unit of competency. |
Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide. |
Elements and Performance Criteria
ELEMENT |
PERFORMANCE CRITERIA |
1. Identify economic principles and theories related to financial services functions and tasks |
1.1. Knowledge of economic principles that apply to the industry is developed and applied 1.2. Microeconomic theory of markets and how this influences financial products and services is understood 1.3. Capital adequacy regulation and requirements as they apply to work functions are accessed and considered |
2. Evaluate economic aspects that apply to decision making |
2.1. Relevant financial modelling techniques are applied to economic data to inform decision making 2.2. Appropriate asset pricing models and their application are known and used 2.3. Models of determining organisational value in relation to capital structure are applied |
3. Review own work |
3.1. Own work is evaluated in the context of relevant economic principles 3.2. Ways to improve performance through understanding of how economics applies to own decision making are considered |
4. Maintain a personal understanding of economic policies |
4.1. Current economic theories and their impact on the industry are researched to ensure relevant knowledge is current 4.2. Contemporary economic principles are integrated into work practices |
Required Skills and Knowledge
REQUIRED SKILLS AND KNOWLEDGE |
This section describes the skills and knowledge required for this unit. |
Required skills |
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Required knowledge |
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Evidence Guide
EVIDENCE GUIDE |
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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. |
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Overview of assessment |
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Critical aspects for assessment and evidence required to demonstrate competency in this unit |
Evidence of the ability to:
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Context of and specific resources for assessment |
Assessment must ensure:
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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:
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Guidance information for assessment |
Range Statement
RANGE STATEMENT |
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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. |
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Economic principles may include: |
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Microeconomic theory of markets may include: |
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Capital adequacy regulation and requirements include: |
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Financial modelling techniques include but are not limited to: |
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Asset pricing models cover: |
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Organisational value may include: |
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Economic theories include but are not limited to: |
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Unit Sector(s)
Unit sector |
Industry capability |
Competency field
Competency field |
Co-requisite units
Co-requisite units |
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