Unit of competency Outline
Date retreived
23/07/2026 7:18 AM AWST
23/07/2026 7:18 AM AWST
Whilst all efforts are made to provide accurate and timely information from the relevant source/documentation, please be aware that the information supplied may not be the most current version. The accuracy of the detail has not been confirmed by the Department and therefore should not be relied upon without first confirming the contents.
Apply economic principles to work in the financial services industry
Apply economic principles to work in the financial services industry
Unit of competency
National Code
FNSINC601A
FNSINC601A
State Code
D4171
D4171
TGA Status
Replaced
Replaced
DTWD Status
Replaced
Replaced
State Implementation and Classification
Approved Date
31/07/2014
Field of Education
091901 - Economics
Original Release Date
31/07/2014
Nominal Hours
55
Description
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.
Notes
Elements and 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
RANGE STATEMENT
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.
Economic principles may include:
the difference between macroeconomics and microeconomics
the difference between normative and positive economics
quantity theory of money
free markets
fiscal and monetary policy, balance of payments, surpluses and deficits
market equilibrium
command and mixed economies
inflation, deflation and stagflation
Gross Domestic Product (GDP)
direct and indirect taxes, subsidies
cause and effect.
Microeconomic theory of markets may include:
monopoly and competition
scarcity
opportunity cost
market failure
resource allocation
fixed and variable costs
average and marginal costs.
Capital adequacy regulation and requirements include:
financial management and disclosure
credit ratings and agencies
capital requirements and capital to assets ratio
unfunded loan commitments, letters of credit, derivatives, hybrid instruments and foreign exchange contracts
arbitrage and hedge funds
value function iteration
Basel accords
role of the Australian Prudential Regulation Authority (APRA)
call reports
margin buying/lending.
Financial modelling techniques include but are not limited to:
Net Present Value (NPV)
break-even analysis
yield curves
forecasting cash inflow and outflow
discounted cash flow
break-even and contribution margin analysis
analysis of segmental performance and profit variance
forecasting with regression and Markov methods
Value at Risk (VaR)
normal and Gaussian distribution
credit scorecards.
Asset pricing models cover:
rate of return
systematic and unsystematic risk
elasticity of demand
interpreting demand curves and diagrams
utility maximisation.
Organisational value may include:
tangible and intangible assets
knowledge assets and intellectual capital
Tier 1 and Tier 2 capital
leverage ratio
stockholder's equity ratio.
Economic theories include but are not limited to:
capitalism
Keynesian economics
post-Keynesian economics
value theory
supply-side economics
monetarism.
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.
Economic principles may include:
the difference between macroeconomics and microeconomics
the difference between normative and positive economics
quantity theory of money
free markets
fiscal and monetary policy, balance of payments, surpluses and deficits
market equilibrium
command and mixed economies
inflation, deflation and stagflation
Gross Domestic Product (GDP)
direct and indirect taxes, subsidies
cause and effect.
Microeconomic theory of markets may include:
monopoly and competition
scarcity
opportunity cost
market failure
resource allocation
fixed and variable costs
average and marginal costs.
Capital adequacy regulation and requirements include:
financial management and disclosure
credit ratings and agencies
capital requirements and capital to assets ratio
unfunded loan commitments, letters of credit, derivatives, hybrid instruments and foreign exchange contracts
arbitrage and hedge funds
value function iteration
Basel accords
role of the Australian Prudential Regulation Authority (APRA)
call reports
margin buying/lending.
Financial modelling techniques include but are not limited to:
Net Present Value (NPV)
break-even analysis
yield curves
forecasting cash inflow and outflow
discounted cash flow
break-even and contribution margin analysis
analysis of segmental performance and profit variance
forecasting with regression and Markov methods
Value at Risk (VaR)
normal and Gaussian distribution
credit scorecards.
Asset pricing models cover:
rate of return
systematic and unsystematic risk
elasticity of demand
interpreting demand curves and diagrams
utility maximisation.
Organisational value may include:
tangible and intangible assets
knowledge assets and intellectual capital
Tier 1 and Tier 2 capital
leverage ratio
stockholder's equity ratio.
Economic theories include but are not limited to:
capitalism
Keynesian economics
post-Keynesian economics
value theory
supply-side economics
monetarism.
EVIDENCE GUIDE
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.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
use knowledge of common economic theories that relate to the financial services industry
apply knowledge of microeconomic principles and how they relate to financial services industry products, services and organisational practices
research economic trends and evaluate impacts
access and interpret corporate regulation
use a range of financial modelling techniques and tools
review own performance in applying knowledge of economic principles in day-to-day work functions
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables.
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:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills which may include formal examinations
setting and reviewing workplace projects and business simulations/scenarios.
Guidance information for assessment
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.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
use knowledge of common economic theories that relate to the financial services industry
apply knowledge of microeconomic principles and how they relate to financial services industry products, services and organisational practices
research economic trends and evaluate impacts
access and interpret corporate regulation
use a range of financial modelling techniques and tools
review own performance in applying knowledge of economic principles in day-to-day work functions
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables.
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:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills which may include formal examinations
setting and reviewing workplace projects and business simulations/scenarios.
Guidance information for assessment
Replaced By
| State Code | National Code | Title | Type |
|---|---|---|---|
| AUR93 | FNSINC601 | Apply economic principles to work in the financial services industry | Unit of competency |
| State Code | National Code | Title | Type |
|---|---|---|---|
| S735 | FNS60210 | Advanced Diploma of Accounting | Qualification |
| S718 | FNS50210 | Diploma of Accounting | Qualification |
| S733 | FNS51710 | Diploma of Applied Anti-Money Laundering and Counter Terrorism Financing Management | Qualification |
| D724 | FNS51611 | Diploma of Securitisation | Qualification |