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

Part B: Course Detail

Teaching Period: Term1 2016

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

Arie Herrnstadt

03 9925 5897

arie.herrnstadt@rmit.edu.au

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:

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

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.


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

A range of learning activities are planned for this course including self-paced and collaborative class room based activities.

The self-based activities will be delivered through various technology platforms and will include quizzes, scenario case studies and interactive sessions.

The collaborative classroom based activities will include group discussion, group problem solving activities and opportunities to practice skills in a simulated workplace environment.


Teaching Schedule

Week   Starting    TopicAssessment         
1 8 FebInduction 
2 15 FebTopic 1 Pricing Methods 
3 22 FebPricing methods and policies 
4 29 FebTopic 2 Exchange rate calculations Phase 1 Task 1
5 7 MchReasons for exchange rate changes 
6 14 MchRole of central banks in exchange rates 
7a 21 MchManaging exchange rate risks: internal hedging 
  MID SEMESTER BREAK 
7b 28 MchManaging exchange rate risks: internal hedging 
8 4 AprManaging exchange rate risks: money market hedging Phase 2 Task 1
9 11 AprTopic 3 Methods of payment: credit risk 
10 18 AprOptions for international payments 
11 25 AprBargaining for methods of payment 
12 2 MayTopic 4 Getting faster payment if suffering cash shortages 
13 9 MayRevision and review Phase 3 Task 1
14 16 MaySupervised in-class assessment Task 2 Test
15 23 mayFeedback 
16 30 MayFinal resubmissions if necessary 

Week 1 will consist of an induction to the course which will include completion of a pre training review and familiarisation with:
• Your teacher(s) and other students.
• Services and facilities
• Student responsibilities
• Where to get support
• Course requirements, key learning outcomes, assessment, feedback and grading.
• Submission requirements and the resubmission policy
• Plagiarism
• Appeals
• Extensions and Special Consideration
• Privacy

Please note that the above schedule is a guide and may be altered as deemed necessary by your teacher.


Learning Resources

Prescribed Texts

There is no prescribed text but students are encouraged to download the book entitled "Finance of International Trade" published by the National Bank and available from the following website: http://www.nab.com.au/downld/int_trade_pub


References

Recommended readings Viney,C,McGrath’s Financial Institutions, Instruments and Markets, Irwin McGraw Hill 6th ed Brown, A, et al, International Banking and Finance, Serendip Publications


Other Resources

Bank websites advising customers how payments are made for imports and exports e.g. cba.com.au

Reserve Bank of Australia rba.gov.au

other websites as appropriate


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

This course has 2 assessments.  Students must successfully complete all tasks to be deemed competent.

Assessment Task 1
Date handed out: Week 2
Date and time due: Three phased submissions due Weeks 4, 8 and 13
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 demonstrate that you can effectively communicate in a short business report format.

It also 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.

Your participation and competence may 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.

Assessment Task 2
Date handed out: Week 14
Date and time due: Week 14
Group or Individual: Individual supervised test.

Purpose:
The test will confirm your understanding and competency in the range of elements and skills listed in the course accreditation document.

Requirements:
The test will be no longer than two hours, in the form of short answer questions, frequently based on case study questions similar to those presented in the weekly tutorial questions during class.

Submission requirements:
Assessment tasks must be submitted online through blackboard.

You must:
• Retain a copy of your assessment tasks.
• 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 work for assessment is available on blackboard.
• For group assignments - all group members must complete and sign the cover sheet.
• Each page of your assessment you should include footer with your name(s), student number(s), the title of the assessment, unit code and title and page numbers. For example, Julie Macpherson, 324567, Task 2, OHS2345C Ensure safe workplace, Page 1 of 10.

Resubmissions:
If you are found to be Not Yet Competent 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.

Final Date for All Assessments.
Unless the Late Submission Procedures (see above) are applied, No assessment tasks or resubmissions will be accepted after 5pm Friday, Week 16.
 


Assessment Matrix

Marking Guide (competency):
Vocational Education and Training (VET) is based on current industry needs and the focus on preparing you for the workplace. Because VET courses are informed by practical application of knowledge and skills, they are based on a system known as ‘competency based training’ (CBT). So when you are assessed in VET it is about whether you are competent to do the job, as well as having a firm grasp on the knowledge and skills required to do that job, as opposed to traditional curriculum based education settings that are often based on knowledge retention.
You need to demonstrate you are competent in each element of the unit of competency you are studying.
You will receive feedback on each assessment task that will inform you whether you are competent or not and how well you are performing. Once competent in all elements of the unit you receive a competency grading.

Marking Guide (Grading)
After achieving competency we then grade your performance in the unit; this gives you the opportunity to have the level of your performance formally recognized against industry standards and employability skills.

You will be provided with an assessment matrix in the assessments area of the unit blackboard shell. Generally, your grading will be assessed against how well you:
• Perform the activities as required by the learning elements of this unit of competency.
• Demonstrate the required knowledge for this unit of competency.
• Execute the required skills for this unit of competency.
• Demonstrate your employability skills through contribution to learning activities related to this assessment, timeliness, use of technology and teamwork.

Final Grades table:
DNS - Did not submit for assessment
NYC - Not yet competent
CAG - Competency achieved – graded
CC - Competent with credit
CDI - Competent with distinction
CHD - Competent with high distinction

Other Information

Late submissions
If circumstances outside your control are likely to prevent you from submitting an assessment item on time, you may apply to your teacher for an extension of up to seven calendar days.
You must apply for an extension at least one working day prior to the submission deadline.
More Information: http://www.rmit.edu.au/students/assessment/extension
Form to use: http://mams.rmit.edu.au/seca86tti4g4z.pdf

Special Consideration
Extensions of greater than seven days will only be granted to eligible students through the special consideration process. 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

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
 

Course Overview: Access Course Overview