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A20474 FINANCIAL SERVICES INDUSTRY
FNSINC611 Apply economic principles to work in the financial services industry
A s sessm ents
 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
FNS60222 ADVANCED DIPLOMA 
OF ACCOUNTING
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Contents
Introduction ����������������������������������������������������������������������������������������������������������������������������� 3
Assessment Mapping �������������������������������������������������������������������������������������������������������������� 4
Assessment 1 ��������������������������������������������������������������������������������������������������������������������������� 6
Assessment 2 ��������������������������������������������������������������������������������������������������������������������������� 9
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Introduction
This subject, A20474 Financial Services Industry, in the FNS60222 Advanced Diploma of 
Accounting, comprises two Assessments� The following table summarises the information 
about each assessment� 
APC is using Rubric for assessment marking� A rubric is a tool used to interpret and grade 
students’ work against a set of criteria� 
Assessment 1 Assessment 2
Due Date Sunday in Week 5 Sunday in Week 7
Weighting 50% 50%
Grading Method Rubric Rubric
Submission Method Students are required to submit their assessments to myAPC�hub� 
Feedback The results will be available within 7 days after the due date of the assessment� 
Instructions
1� Assessments should be completed as per your trainer’s instructions� 
2� Assessments must be submitted by the due date to avoid a late submission penalty� 
3� Plagiarism is copying someone else’s work and submitting it as your own� You must 
write your answers in your own words and include a reference list� You are required to 
run the plagiarism report on your assessments prior to the submission, and ensure that 
the plagiarism score is below 30%� A mark of zero will be given for any assessment or 
part of an assessment that has been plagiarised� 
4� You may discuss your assessments with other students, but submitting identical answers 
to other students will result in a zero mark� Your answers must be yours alone� 
5� All the assessments must be submitted to myAPC�hub� 
6� You must attempt all questions in the assessment� 
7� You must get satisfactory results on both assessments to pass the subject� 
8� All assessments are to be completed in accordance with WHS regulatory requirements� 
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Assessment Mapping
Subject: A20474 Financial Services Industry
Unit of Competency: FNSINC611 Apply economic principles to work in the financial services 
 industry
Element Performance Criteria Assessment 1 Assessment 2
1� Identify economic 
principles that 
impact work
1�1 Develop knowledge of economic principles 
relevant to industry and own role
Q 1-7
1�2 Develop knowledge of microeconomic 
theory and influences on financial products and 
services that relate to tasks within own role
Q 3
1�3 Identify capital adequacy regulation and 
requirements applicable to work functions
Q 4
2� Use knowledge of 
economic principles 
in work
2�1 Apply relevant financial modelling 
techniques to economic data to inform 
decision making
Task 1, Task 2
2�2 Analyse and apply appropriate asset 
pricing models
Task 1, Task 2
2�3 Apply models to determine organisational 
value in relation to capital structure
Task 2
2�4 Evaluate own work in context of relevant 
economic principles
Task 2
3� Review work 
and maintain 
understanding of 
economic principles
3�1 Research current economic theories and 
their impact on the industry and confirm 
relevant current knowledge
Q 3, 4, 5
3�2 Evaluate own work in context of relevant 
economic principles
Task 2
3�3 Integrate contemporary economic 
principles into work practices
Task 2
Performance Evidence Assessment 1 Assessment 2
The candidate must demonstrate the ability to complete the tasks outlined in the elements, 
performance criteria and foundation skills of this unit, including evidence of the ability to:
• apply economic principles to at least one product and one 
service Q 7 Task 2
• apply financial modelling techniques to at least one scenario� Task 1
Knowledge Evidence Assessment 1 Assessment 2
The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, 
performance criteria and foundation skills of this unit, including knowledge of:
• key features of common economic theories that relate to the 
financial services industry Q 1, 2, 3
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
• key features of microeconomic principles and how they relate to 
financial services industry products, services and organisational 
practices
Q 3
• capital adequacy requirements for financial services organisations 
based on financial product mix Q 4
• asset pricing models and their use in identifying organisational 
value and capital structures Task 1
• key economic theories and valuation of assets relevant to own role Q 3, 4, 5 Task 1
• financial modelling techniques and tools Task 1, Task 2
• industry or organisation financial markets, products and services Q 2
• legislative and statutory requirements and industry codes of 
practice relevant to own role Q 5, 6
• techniques and tools for evaluation and interpretation of research 
data� Q 5, 6
Foundation Skills Performance Criteria
Skill Description
Learning
• Ensures knowledge of products, legislation, regulations and 
standards relevant to role is accurate, comprehensive and 
current
1�1-1�3, 2�1-
2�4, 3�1-3�3
Numeracy
• Performs mathematical calculations to analyse financial 
information, costs and values for pricing models and capital 
structure
2�1, 2�2, 2�3, 
2�4
Reading
• Analyses complex documentation from a variety of sources, and 
consolidates information relating to specific criteria to assist in 
making high level business and organisational decisions
1�3, 2�2, 2�4, 
3�1, 3�2
Self-
management
• Identifies key factors that impact on decisions and their 
outcomes, drawing on experience, competing priorities and 
decision-making strategies where appropriate
1�1-1�3, 2�1-
2�4, 3�1-3�3
Technology • Uses the main features and functions of digital tools to complete 
work tasks and access information
2�1, 2�2, 2�3, 
2�4, 3�1, 3�2
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Assessment 1
Qualification FNS60222 Advanced Diploma of Accounting
Subject A20474 Financial Services Industry
Assessment method Case Study
Weighting 50%
Unit of Competency FNSINC611 Apply economic principles to work in the financial 
services industry
Important Note to Students:
Please read the Assessment Mapping carefully when preparing your assessments 
to ensure the relevant Performance Criteria, Performance Evidence and knowledgeEvidence for each question are met� 
In this subject, you have learned the skills and knowledge required to apply broad 
principles of financial economics in the financial services industry� Please read the 
scenarios carefully and answer the questions that follow� You will need to reference 
your answers when necessary� 
Case Study: The response of the Reserve Bank of Australia to the 
COVID pandemic economic crisis
After the supply chain crisis resulted from the COVID pandemic, inflation around the world 
increased to unprecedented levels� Many countries decided to fight this high inflation by 
increasing their interest rates� Australia was one of those countries� The Reserve Bank of 
Australia implemented a conservative monetary policy to protect the financial markets� 
Read the article provided by the RBA and complete the following tasks�
The costs of high inflation1 
Inflation that is too high is a problem for the economy and individuals� Inflation is an 
increase in the prices of the goods and services you buy� Inflation can put pressure on 
your budget as your money won’t go as far as it used to�
Take, for example, your weekly visit to the supermarket� When prices are rising faster 
than your wages, over time you won’t be able to afford to buy as many items as 
before�
High inflation can come from a few sources including when businesses can’t supply 
enough products to meet customer demand, or when their costs go up�
That can be made worse if people come to expect high inflation, as it can be self-
fulfilling and lead businesses to put through even bigger price increases�
1� This short article was originally produced by the Reserve Bank of Australia, distributed as a video - 
https://www�youtube�com/watch?v=I_CtVYTgYOc
https://www.youtube.com/watch?v=I_CtVYTgYOc
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
High inflation makes it hard for households and businesses to plan ahead because they 
don’t know what prices they will be buying and selling at�
Managing inflation comes down to getting a good balance between supply and 
demand for goods and services� People often ask us how our interest rate changes 
affect inflation� Here’s the main way�
When inflation is too high, we increase our policy interest rate which increases 
borrowing costs for commercial banks� The banks usually pass on these higher costs 
by increasing their interest rates on loans�
People and businesses with loans will see their repayments rise� As people and 
businesses have bigger repayments on their loans, they have less money to spend on 
other things� This reduces demand for goods and services, economic activity slows 
down and this leads to lower inflation�
Our goal is to keep annual inflation between 2–3 per cent on average and we need to 
keep adjusting the policy interest rate until we are confident inflation is under control�
Maintaining inflation within this range preserves the spending power of money and 
encourages strong and sustainable growth in the economy, which benefits us all�
Required: Answer the following questions based on the information from the case study 
above� 
1� Explain the purpose of increasing interest rates� How does this help control high 
inflation? Explain and properly reference your answer�
2� Explain how high-interest rates could affect the following financial markets, products 
and services:
a� Banking system
b� Stock market
c� A person with a large amount of money in a savings account
3� In classic microeconomic theory, the concept of “The invisible hand” states that “free 
markets will determine equilibrium in the supply and demand for goods� This means 
that by following their self-interest, consumers and organisations can create an efficient 
allocation of resources for the whole of society without the need for intervention”� 
a� Do you agree with the concept of the invisible hand? Explain your answer�
b� Do you think that increasing interest rates when trying to control inflation is 
compatible with the invisible hand? Explain your answer�
4� Research and discuss in your own words the concept of capital requirement (also known 
as capital adequacy ratio)� Address these points in your answer:
a� What is the meaning and importance of capital requirement (also known as capital 
adequacy)?
b� What is the current Australian capital adequacy ratio?
5� Research, and explain how and how often the CPI is calculated by the Australian 
Bureau of Statistics (ABS)�
6� Review Section 1�13 in your Workbook and briefly explain in your own words the role 
and purpose of:
a� the Australian Prudential Regulation Authority (APRA)
b� the Australian Securities and Investments Commission (ASIC)
c� the Reserve Bank of Australia (RBA)
d� the Australian Treasury
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
7� Identify at least one product or service of your choice that has been affected by 
economic variables in recent years� Explain what the product/service is and how the 
market has changed due to economic circumstances� (At least 100 words) 
– END –
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Assessment 2
Qualification FNS60222 Advanced Diploma of Accounting
Subject A20474 Financial Services Industry
Assessment method Case Study
Weighting 50%
Unit of Competency FNSINC611 Apply economic principles to work in the financial 
services industry
Important Note to Students:
Please read the Assessment Mapping carefully when preparing your assessments 
to ensure the relevant Performance Criteria, Performance Evidence and knowledge 
Evidence for each question are met� 
In this subject, you have learned the skills and knowledge required to apply broad 
principles of financial economics in the financial services industry� Please read the 
scenarios carefully and answer the questions that follow� You will need to reference 
your answers when necessary� 
Assessment 2
Review Section 2.7 of your workbook and complete the following tasks�
Task 1 - Apply financial modelling techniques
As we have discussed in Section 2�7 of your workbook, the Capital Asset Pricing Model 
(CAPM) explains the connection between systemic risk, or the general dangers of investing, 
and projected return for assets, especially shares� The relationship between an asset’s beta, 
the risk-free rate (usually the interest rate on Government bonds), and the market risk 
premium, or the projected return on the market less the risk-free rate, is the foundation for 
the model�
This is the CAPM formula:
Eri = Rf + [(ERp – Rf) x ß]
Where:
Eri = Expected return of security
Rf = Risk-free interest rate
ERp = Expected return on Portfolio
ß = Beta of the security
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Scenario:
You are the Financial services analyst for a private investor� Your client is considering investing 
$1,000,000 in Australian shares� Before making the investment, your client has asked you to 
calculate the expected return on those investments� This is the information you have for this 
project:
Australian Government Bonds Return (risk-free rate) 1�57%
Average return of Australian shares (Expected return on portfolio) 6�50%
Investment option Investment Beta
COBRE LIMITED 6�71
WA1 RESOURCES LTD5�86
TEMPEST MINERALS LIMITED 5�58
VDM GROUP LIMITED 4�79
SOUTHERN CROSS GOLD LTD 4�18
1� Using the CAMP model, calculate the expected return on the investment options� Use the 
following table to guide you through the process� 
Investment Option Return on 
Government Bonds
Average return on 
Portfolio of Shares
Investment 
Beta
Expected 
Return
COBRE LIMITED
WA1 RESOURCES LTD
TEMPEST MINERALS 
LIMITED
VDM GROUP LIMITED
SOUTHERN CROSS 
GOLD LTD
2� Once you have calculated the expected returns, choose the one with the highest return and 
present a report to your client� Follow this table to complete this task� 
INVESTOR REPORT
Best investment option name
Brief description of investment option (What 
is the company, what do they do, etc�)
What is the expected return rate?
What is the expected return if the investor 
decided to invest $1,000,000 for 5 years? 
(Use the Future Value Formula)
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Task 2 - Apply economic principles to financial products
You have been hired as financial services consultant by a private investor who desires to 
invest in at least one of the following shares:
Your task is to analyse the share prices of these companies for 2022 and report on the 
best investment option� Review carefully the following share prices report and answer the 
questions that follow� 
Date Tesla, Inc. 
(TSLA)
Netflix, Inc. 
(NFLX)
Amazon.com, 
Inc. (AMZN)
Apple Inc. 
(AAPL)
1/1/2022 $ 312�240 $ 427�140 $ 149�574 $ 173�771 
1/2/2022 $ 290�143 $ 394�520 $ 153�563 $ 164�167 
1/3/2022 $ 359�200 $ 374�590 $ 162�997 $ 173�824 
1/4/2022 $ 290�253 $ 190�360 $ 124�282 $ 156�940 
1/5/2022 $ 252�753 $ 197�440 $ 120�210 $ 148�170 
1/6/2022 $ 224�473 $ 174�870 $ 106�210 $ 136�304 
1/7/2022 $ 297�150 $ 224�900 $ 134�950 $ 162�016 
1/8/2022 $ 275�610 $ 223�560 $ 126�770 $ 156�742 
1/9/2022 $ 265�250 $ 235�440 $ 113�000 $ 137�971 
1/10/2022 $ 227�540 $ 291�880 $ 102�440 $ 153�086 
1/11/2022 $ 194�700 $ 305�530 $ 96�540 $ 147�785 
1/12/2022 $ 137�800 $ 288�190 $ 85�190 $ 132�300 
1� Complete the following:
a� Calculate the average price for 2022 for each share�
b� Calculate the forecast price for 01/01/2023 using the TREND formula in your 
spreadsheet software (Excel, Numbers or GoogleSheet)�
Hint: Enter the following data to Excel or Google Sheet and then answer Part (a) and 
(b) of the questions to calculate the average price for 2022 and the forecast price for 
01/01/2023. 
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A20474 Financial Services Industry | FNS60222 Advanced Diploma of Accounting | Assessments v1.0 
Young Rabbit Pty Ltd (ABN 28 003 381 182) trading as Australian Pacific College RTO Code: 90396 | CRICOS Provider Code: 01331F | © 2023
Date Tesla NetFlix Amazon Apple
1/1/2022 $ 312�240 $ 427�140 $ 149�574 $ 173�771 
1/2/2022 $ 290�143 $ 394�520 $ 153�563 $ 164�167 
1/3/2022 $ 359�200 $ 374�590 $ 162�997 $ 173�824 
1/4/2022 $ 290�253 $ 190�360 $ 124�282 $ 156�940 
1/5/2022 $ 252�753 $ 197�440 $ 120�210 $ 148�170 
1/6/2022 $ 224�473 $ 174�870 $ 106�210 $ 136�304 
1/7/2022 $ 297�150 $ 224�900 $ 134�950 $ 162�016 
1/8/2022 $ 275�610 $ 223�560 $ 126�770 $ 156�742 
1/9/2022 $ 265�250 $ 235�440 $ 113�000 $ 137�971 
1/10/2022 $ 227�540 $ 291�880 $ 102�440 $ 153�086 
1/11/2022 $ 194�700 $ 305�530 $ 96�540 $ 147�785 
1/12/2022 $ 137�800 $ 288�190 $ 85�190 $ 132�300 
Average price 
for 2022 for 
each share
Forecast price 
for 01/01/2023
 
c� Produce a comparative line graph to analyse the prices of the 4 shares during 2022�
d� Identify and explain at least 2 economic variables that affected the prices of these 
shares during 2022� Mention specific details when possible� (Example: Business 
takeovers, merges, global inflation, supply chain issues etc)� Reference your answers 
when you provide information from other sources�
2� Based on your calculations and analysis in Question 1, answer the following� 
a� What is the best-performing share during 2022?
b� Where should your client invest their money? Briefly explain your answer� 
c� What could you do to improve your own work as a financial services analyst in this 
case? Explain your answer�
– END –
	Introduction
	Assessment Mapping
	Assessment 1
	Assessment 2