Course Title: Review the financial structures and processes in international trade

Part B: Course Detail

Teaching Period: Term1 2017

Course Code: MKTG7896

Course Title: Review the financial structures and processes in international trade

School: 650T Vocational Business Education

Campus: City Campus

Program: C6144 - Advanced Diploma of International Business

Course Contact: Tim Wallis

Course Contact Phone: +61 3 9925 5423

Course Contact Email: timothy.wallis@rmit.edu.au


Name and Contact Details of All Other Relevant Staff

Nominal Hours: 60

Regardless of the mode of delivery, represent a guide to the relative teaching time and student effort required to successfully achieve a particular competency/module. This may include not only scheduled classes or workplace visits but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Pre-requisites and Co-requisites

None

Course Description

This unit describes the skills and knowledge required to analyse international trade finance variables within Australia and in a global context. It includes examining the structures and processes of financing international import and export transactions in the banking system, including optional finance models and practices that are available to international businesses.


National Codes, Titles, Elements and Performance Criteria

National Element Code & Title:

VU21669 Review the financial structures and processes in international trade

Element:

1. Analyse aspects of international trade transactions

Performance Criteria:

1.1  Analyse pricing methods and their application in international trade transactions

1.2  Analyse invoicing options and their impact on total landed cost in international trade transactions

1.3  Calculate gross margin, net margin, markup and breakeven point in international trade transactions

1.4       Review options for methods of payment.

Element:

2. Analyse rate movement and exposure in international trade transactions

Performance Criteria:

2.1   Analyse purchasing power parity (PPP) in relation to foreign exchange rates

2.2  Analyse benchmarking values of trade-weighted baskets and balances of trade between different countries.

2.3  Examine and evaluate predominant exchange rate movements for various trading nations in relation to the politico-economic trends.

2.4  Establish measurement significance of interest rate differentials to international banks.

2.5  Review application of bank published exchange rate schedules on buying and selling rates for foreign countries.

2.6  Compare and evaluate functions and operations of the Reserve Bank of Australia against other central banks.

2.7       Identify and review foreign exchange rate risk management strategies.

Element:

3. Review credit risk management strategies for international trade

Performance Criteria:

3.1   Assess risk for non-payment.

3.2   Evaluate relative bargaining positions and credit risk ratings of parties in international trade transactions

3.3       Establish options for a payment mechanism.

Element:

4. Investigate the application of payment

Performance Criteria:

4.1   Investigate invoice discounting techniques.

4.2   Investigate the application of “factoring” and “forfeiting” to the payment procedure

4.3   Investigate penalty arrangements for late payment

4.4       Investigate options for non-payment transactions


Learning Outcomes


This course is structured to provide students with the optimum learning experience in order to demonstrate the skills and knowledge required to analyse international trade finance variables within Australia and in a global context. It includes examining the structures and processes of financing international import and export transactions in the banking system, including optional finance models and practices that are available to international businesses.


Details of Learning Activities

Learning will be class based. Theory and practical examples will be provided on PowerPoint slides with additional material on Blackboard. Students' learning will be reinforced through theory, case study and practical exercise questions supplied for each topic. 


Teaching Schedule

Week

Commence

Date

Topic

Assessments

1

6/2/2017

Introduction to the course including:

·         Course requirements and support documents/resources

·         Course Blackboard access

·         Accuracy of enrolment

·         Assessment requirements/Cover Sheets

·         Reminder re Plagiarism/Appeals

·         Extensions/Resubmissions

·         Feedback in this course

·         Getting help

 

Overview of payments for international trade.

Resources on Blackboard

 

 

 

2

13/2/2017

Topic 1Pricing methods

 

3

20/2/2017

Pricing methods and policies

 

4

27/2/2017

Topic 2Exchange rate calculations

Phase 1 Task 1

5

6/3/2017

Reasons for exchange rate changes

 

6

13/3/2017

Effect of central banks on exchange rates

Feedback on Phase 1

7

20/3/2017

Managing exchange rate risks: internal hedging

 

8

27/3/2017

Managing exchange rate risks: money market hedging

Phase 2 Task 1

9

3/4/2017

Topic 3Methods of payment: credit risk

 

10a

10/4/17

Options for international payments

Feedback on Phase 2

 

 

Mid Semester Break  13 – 19 April inclusive

 

10b

20/4/17

Options for international payments

 

11

24/4/17

Negotiating methods of payment

 Phase 3 Task 1

12

1/5/17

Topic 4 Escalating payment to avoid cash shortages

 

13

8/5/17

Revision and review

Feedback Phase 3

14

15/5/17

Supervised assessment

Task 2 Test

15

22/5/17

Feedback

 

16

29/5/17

Final resubmissions if necessary

 

 

 


Learning Resources

Prescribed Texts


References


Other Resources


Overview of Assessment

Assessment Methods

Assessment methods have been designed to measure achievement of the requirements in a flexible manner over a range of assessment tasks, for example:

  • direct questioning combined with review of portfolios of evidence and third party workplace reports of on-the-job performance by the candidate
  • review of final printed documents
  • demonstration of techniques
  • observation of presentations
  • oral or written questioning to assess knowledge of software applications

You are advised that you are likely to be asked to personally demonstrate your assessment work to your teacher to ensure that the relevant competency standards are being met.

Performance Evidence

You must demonstrates competency in this unit by providing evidence of the following:

  • analysis of the banking and non-banking finance system and its operating environment within Australia and in a global context
  • analysis of purchasing power parity in relation to exchange rates
  • review of credit risk management strategies for international trade; evaluation of the role of confirming houses, freight forwarders, banks, customs agents.
  • analytical and information gathering skills to:
    - research and analyse banking services
    - conduct comparative analysis
  • communication skills to:
    - relate to people from difference cultures
    - question information
    - clarify issues
    - report on findings and processes
  • risk management skills to:
    - identify
    - assess
    - monitor
  • mitigate the impact of risk to international business

Performance Knowledge

Further, you must provide evidence of knowledge of the following:

  • core banking services including:
    - financial
    - loans and credit facilities
    - cheque/savings accounts functions
  • basic economic concepts including:
    - supply/demand
    - market/planned/mixed economy
    - how the market works
    - market forces
    - Porters 5 Forces
  • history of banking and international banking
  • clearinghouse functions, such as:
    - IATA
    - commodity exchanges
  • Reserve Bank of Australia
  • “Spread” (bank profit margin in currency exchanges)
  • exchange rates
  • purchasing power parity
  • bank published schedules and forward margins
  • trade weighted baskets
  • politico-economic trends in international finance
  • sources of finance
  • exchange rate contracts
  • hedging
  • credit risk and insurance
  • countertrade and variations
  • methods of payment
  • bills of exchange
  • documentary levels of credit
  • factoring, forfeiting and confirming
  • cargo insurance

Feedback

Feedback will be provided throughout the semester in class and/or online discussions. You are encouraged to ask and answer questions during class time and online sessions so that you can obtain feedback on your understanding of the concepts and issues being discussed. Finally, you can email or arrange an appointment with your teacher to gain more feedback on your progress.

You should take note of all feedback received and use this information to improve your learning outcomes and final performance in the course.


Assessment Tasks

Assessment 1 - Case study Assignment

Date handed out:  Week 2

Date and time due: Three phased submissions due Weeks 4, 8 and 11

Group or Individual:  Group with maximum of two students  

                         

Purpose:

This assignment is intended to reinforce course requirements covered in class.

It requires you to show you can identify, avoid or manage the risks of trading internationally and that you can integrate the various topics covered in this course into one consistent whole.

The means and format for demonstrating this is through a short business report.

Your participation and competence will be determined and confirmed by an interview on your assignment.

 

Requirements:

The assignment requirements are to be presented in a business report format (key headings) with appropriate citation and referencing to support the information you have presented. It should not be longer than 1,500 words.

 

Details of Assessment:

You will be asked to discuss the financial aspects of a proposal to export a physical product to a third world country, and how you would protect your employer from the risks involved in this scenario.

 

Assessment 2 - Supervised industry based case studies questions

Date handed out:  Week 14

Date and time due:  Week 14

Group or Individual: Individual.                         

Purpose:

This assessment will confirm your understanding and competency in the range of elements and skills listed in the course accreditation document. Since you are required to demonstrate individual competency in all aspects of the course, it is your answers in this assessment that will determine whether or not you are assessed competent in this course. 

Requirements:

The assessment in the first instance will be distributed in the form of questions based on industry based case studies that must be answered in writing. If necessary in subsequent assessments, case studies and questions may be distributed in writing or verbally, and may be answered verbally. The assessment will be no longer than two hours. The case studies and questions will be similar to those presented in the weekly tutorial questions during class.

Details of Assessment:

 


Assessment Matrix

Submission Requirements
You should:
• Ensure that you submit assessments on or before the due date.
• Always retain a copy of your assessment tasks. (Hard copy and soft copy)
• When you submit work for assessment at RMIT University you need to use a cover sheet that includes a declaration and statement of authorship. You must complete, sign and submit a cover sheet with all work you submit for assessment, whether individual or group work. On the cover sheet you declare that the work you are presenting for assessment is your own work. An assignment cover sheet for submission of each assessment task is available on blackboard.
• Each page of your assessment should include footer with your name, student number, the title of the assessment, unit code and title and page numbers. For example, Julie Macpherson, 324567, Task 2,

Late Submission Procedures
You are required to submit assessment items and/or ensure performance based assessment is completed by the due dates.
If you are prevented from submitting an assessment item on time, by circumstances outside your control, you may apply in advance to your teacher for an extension to the due date of up to seven calendar days.

More Information: http://www.rmit.edu.au/students/assessment/extension
Form to use: http://mams.rmit.edu.au/seca86tti4g4z.pdf

Where an extension of greater than seven days is needed, you must apply for special consideration.
Applications for special consideration must be submitted no later than two working days after the assessment task deadline or scheduled examination.
More Information: http://www.rmit.edu.au/browse;ID=g43abm17hc9w
Form to use: http://mams.rmit.edu.au/8a5dgcaqvaes1.pdf

Resubmissions (VET Programs):
If you are found to be unsuccessful in a Course Assessment Task you will be allowed one resubmission only. Your teacher will provide feedback regarding what you need to do to improve and will set a new deadline for the resubmission. The highest grade you will receive if your resubmission is successful is
“CAG”.
If you are still not meeting the assessment requirements you must apply to your Program Manager in writing outlining the steps you will take to demonstrate competence in your course. Your submission will be considered by the Program Team and you will be advised of the outcome as soon as possible.

Adjustments to Assessment
In certain circumstances students may be eligible for an assessment adjustment. For more information about the circumstances under which the assessment arrangements might be granted please access the following website:
More Information: http://rmit.edu.au/browse;ID=7usdbki1fjf31

Marking Guide (Competency):
You must demonstrate that you have all the required skills/knowledge/elements in the unit of competency you are studying.
You will receive feedback on each assessment task that will inform you about your progress and how well you are performing.

Marking Guide (Grading)
After achieving competency we then grade your performance in the unit and you will achieve one of the following grades:

Final Grades table:
CHD Competent with High Distinction
CDI Competent with Distinction
CC Competent with Credit
CAG Competency Achieved – Graded
NYC Not Yet Competent
DNS Did Not Submit for assessment
Further information regarding the application of the grading criteria will be provided by your teacher.

Other Information

Academic Integrity
Plagiarism
Plagiarism is a form of cheating in assessment and may occur in oral, written or visual presentations. It is the presentation of the work, idea or creation of another person, without appropriate referencing, as though it is your own.
The penalties for cheating in assessment are severe, whether the cheating involves plagiarism, fabrication, falsification of data, copyright infringement or some other method. Penalties can include charges of academic misconduct, cancellation of results and exclusion from your course. It is also a disciplinary offence for you to allow your work to be plagiarised by another student.

Referencing
RMIT Business produce their own referencing guidelines entitled Written reports and essays: guidelines for referencing and presentation in RMIT Business which all Business students should use.
RMIT Business referencing guidelines (RTF, 1,286 KB, 52 pages); A supporting Referencing website has been developed for the RMIT Business guidelines.You can find out more about Academic Integrity at RMIT’s Academic Integrity webpage

Group Assessment
A number of your assessments will rely upon group work. This is a critical part of your program as in the workplace you will be regularly required to work in a team environment. Teamwork is also one of the key employability skills for this qualification.

The key to being successful in group work is getting to know your classmates and finding out what they want to achieve. You should seek to find a team which shares your key interests and drivers.

If you are facing issues with your group, the key is to resolve them quickly well before assessments are due. If you need to you can seek support from your teacher.

Course Overview: Access Course Overview