MPE707 International Banking and Finance Assignment

Reference no: EM133143752

MPE707 International Banking and Finance - Deakin University

Learning Outcome 1: Students will be able to explain the key features of the global financial market

Learning Outcome 2: Students will be able to analyse the behaviour of the foreign exchange market movements

Learning Outcome 3: Students will be able to use the functions available on the trading platform to perform the currency transactions

Learning Outcome 4: Students will be able to understand and manage risk in the foreign exchange market

Learning Outcome 5: Students will be able to address complex issues in the foreign exchange market

Description:
The assignment comprises of two parts: Part A involves speculation with virtual money on a real internet trading website. Part B includes a written report that involves a discussion of what drove the recent (in the months leading to (early) April 2022) developments of the exchange rates relevant to your transactions (Component 1) and the student's own decisions and experience of the trading game (Component 2).

(A) Internet trading game
The Unit Team will provide each student with a free demo account with easyMarkets, an online foreign exchange trading firm. The url for easyMarkets. You will have access to many of the features on the website that actual traders receive, including real- time quotes, news and a variety of charts (though some features that are licensed from third parties are not available on demo accounts).

Each student will be given an account on this website with AUD 50,000 virtual money. The goal of the exercise is simple: to make as much money as possible. easyMarkets provides access to foreign exchange spot markets and forward markets in order for you to perform your speculative activities. The website has a ‘Learn Centre' tab, which contains information on the basics of forex trading. Please take the time to understand how the trading platform works before commencing your trading activities.

All students will receive an email (from the Unit Team) that contains a username and password for an account on easyMarkets before the end of Week 4, 1 April 2022. On receiving this, please do not change the settings (i.e. please do not change the email and password on the account). Please do not provide or add any information of personal nature to the account.

It is highly recommended that you do not start trading straight away; rather, it would be very useful to spend some time reviewing the features on easyMarkets. The foreign exchange market reacts very rapidly to news, so it is important that you do make it a point to spend a few minutes every day keeping track of how economic variables impact the forex market. Also, it is recommended that you start working on Component 1 of Part B before you start trading: Conducting an analysis of recent changes in exchange rates would improve your awareness of exchange rate movements and hence would be useful for the trading exercises.

Assessment:
The speculative component of this assignment is marked out of 10. Grades are based on performance in trading, that is, the amount of money (denominated in AUD, which is automatically calculated by the platform) in the account when the assignment is submitted.
There is a hurdle requirement to pass this component of the assignment: you must undertake at least 12 transactions (or trades) by the due date of the assignment using the demo account provided to you by the Unit Team. For the purpose of this assignment, a transaction is defined as entering into an open position and eventually closing it before submitting the assignment. So, for example, if you bought AUD 100,000 (against USD) on 10 April 2022 and closed this position on 13 April 2022, you would have completed one transaction. Any student who undertakes between 1 and 11 transactions by the assignment due date using the demo account provided by the unit team will receive a score of 3.5 out of 10. Any student who does not conduct any transaction by the assignment due date will receive 0 out of 10. In order to calculate the scores, accounts will be ranked on performance. The distribution of scores for those who satisfy the hurdle requirement (having completed 12 or more transactions) is shown in the table below:

You will realise as you commence trading that the foreign exchange market is extremely volatile. Trading in this market is, therefore, a very risky proposition. The purpose of this trading game is not to make you a forex trader (though some of you may find that you have a talent for it). Rather, it is meant to provide you with insights into the functioning of the foreign exchange market, which is best achieved by participating in it.

(B) Report (30 points) 2,500 words max
The word limit for the report is 2,500 words (excluding executive summary, tables, figures, footnote, appendix and references). The report has two complementary components as follows.

Component 1: Give a brief overview of the trading environment (i.e., macroeconomic conditions) relevant to the chosen currency pairs in your trading game, including the main developments (and reasons behind them) in the months leading to (early) April 2022 of these exchange rates. Please focus on the fundamentals of the market and be sure to make references/citations to any sources of information you have gathered in the process.
Component 2: Present an in-depth analysis of your transactions/trading performance.
The report must start with a cover sheet (using the template posted on CloudDeakin). On the cover sheet, please provide the information as requested (your last name, first name, and student ID; username and password for your trading account; the final account balance and the number of transactions undertaken for each instrument; the currencies traded; and the word count). Your assignment will only be graded when all information required in the cover sheet are provided.

Immediately after the cover sheet, please provide a half-page executive summary. The executive summary should show a brief discussion of your overall strategy, the financial instruments you have used, the number of transactions and currencies you have traded, and justify the total losses/profits on your account and whether or not you have undertaken any risk management activities.

In the body of the report, please start by providing your answers for Component 1 and subsequently present your analysis of Component 2. In the analysis of Component 2, make sure you provide the reasons why you have chosen those currencies, and your plan/expectation for/from the trading activities. You do not need to explain every transaction; this would be virtually impossible given the word limit. Rather, your report should attempt to show how you have employed the understanding of the trading environment and theoretical tools studied in the unit in practical currency trading contexts. It should also highlight any research you have conducted on the foreign exchange market and the manner in which you have approached your trading activity, using specific transactions as examples. Finally, please discuss the use of risk management tools available on the easyMarkets platform during the trading period. Please note that any news items or documents (both printed and online) that helped you make your decisions should be carefully referenced and cited in the report.
Please make sure you have carefully considered the marking rubrics during the trading game as well as report writing; marks for the report will be linked closely to these marking criteria.

In an Appendix to the report, please the "Closed position information". To obtain this statement, please follow the instructions,

1. Make sure all the positions are closed.
2. In the main trading window of the easyMarkets platform, near the bottom right corner you will see two buttons: "Open" and "Closed"
a. Choose the option "Closed".
b. Then, to the left of it you can see the transaction headings for: "EasyTrade", "Day Trading", "Forward Deals", "Pending Orders", "Vanilla Options" and "See All".
c. Select "See All". There you are able to set the date from when you received your account up to the latest date, and show/download all of your closed positions in Excel. You will then need to append them to the report.

Note: ONLY PART B

Attachment:- International Banking and Finance.rar

Reference no: EM133143752

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