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Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited. Deakin Business School is accredited by AACSB. MPE707 – International Banking and Finance Trimester 1, 2020 ASSIGNMENT DUE DATE AND TIME: Week 9, 15 May 2020, 03:00AM Melbourne time PERCENTAGE OF FINAL GRADE: 40% HURDLE DETAILS: Having at least 12 completed transactions by the due date using the demo account provided by the Unit Team; Part B submission is the required condition for getting mark in Part A. Learning Outcome Details Unit Learning Outcome (ULO) Graduate Learning Outcome (GLO) ULO 1: Students will be able to explain the key features of the global financial market Students will be able to explain the key features of the global financial market ULO 2: Students will be able to analyse the behaviour of the foreign exchange market movements Students will be able to evaluate the information and uncertainty in the foreign exchange market ULO 3: Students will be able to use the functions available on the trading platform to perform the currency transactions Students will be able to use the functions available on the trading platform to perform the currency transactions ULO 4: Students will be able to understand and manage risk in the foreign exchange market Students will be able to analyse the foreign exchange market behaviour and manage risk ULO 5: Students will be able to address complex issues in the foreign exchange market Students will be able to develop skills to work independently and take responsibilities in the foreign exchange market Assessment Feedback: Students who submit their work by the due date will receive their marks and feedback on CloudDeakin on 3 June 2020. Page 2 of 6 Description / Requirements In this assignment, students are required to: (A) Speculate with virtual money on a real internet trading website. (B) Write a report (maximum of 2,000 words) on their trading experience. (A) Internet trading game (15 points) The Unit Team will provide each student with a free demo account with easyMarkets, an online foreign exchange trading firm. The url for easyMarkets is https://www.easymarkets.com/au/. 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, 3 April 2020. 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. Please note that your account will not be replenished if your funds run out; this is to ensure that you manage risk while trading. Disclaimer: Deakin University is not responsible for the content that appears on easyMarkets. The use of easyMarkets in this unit is for educational purposes only. easyMarkets is one of many firms providing services for transacting in the foreign exchange market, and students who wish to invest in the foreign exchange market are advised to research the market thoroughly to find a suitable firm for their purpose. Successful speculation in this assignment does not guarantee success in actual speculative trading. Please note: - The demo accounts function in exactly the same way as a normal account, so if your funds run low you may receive a default message from easyMarkets reminding you that your account needs to be replenished. As demo account holder, you do not have to, and should Page 3 of 6 not, provide any information of a personal nature to easyMarkets. So, if you do receive any such message, please ignore it. - Please do not switch to live account as this is not relevant for the assignment. - Before completing your assignment and turning it in, please ensure that all open positions (trades) are closed. If a position remains open after the due date (12 September 2019), it will be closed at any time by the unit team during the marking process, and any losses will be counted toward your final account balance (while any profits will not be counted). Assessment: The speculative component of this assignment is marked out of 15. 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 (15 May 2020) 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 6 April 2020 and closed this position on 9 April 2020, 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 4.5 out of 15. Any student who does not conduct any transaction by the assignment due date will receive 0 out of 15. 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: Ranking of student (with 12 or more completed transactions) Score Top three students 15.0 Next 5% 13.5 Next 15% 12.0 Next 15% 11.0 Next 15% 10.0 Next 15% 9.5 Next 15% 9.0 Next 10% 8.5 Remainder 8.0 Page 4 of 6 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 (25 points) 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 1-page executive summary. The executive summary should show a brief account 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 describe the sophistication and management of the trading strategies. Please start by providing an overview of the trading environment (i.e., macroeconomic conditions) in the weeks/months immediately prior to the start of the trading period (April 2020) relevant to the currencies you have chosen for the transactions, the reasons why you have chosen those currencies, and your plan/expectation for/from the trading activities. As an example, if you have traded the Australian dollar (AUD) you should have mentioned the cash rate decisions by the Reserve Bank of Australia (RBA) in its recent meetings, the performance of the Australian economy in the second half of 2019 (calendar) as well as the first quarter of 2020 (GDP growth, unemployment, inflation etc.), and the status of the commodity markets that Australia exports around this period as these are all critical to the value of the AUD. Similarly, the coronavirus has likely impacted the performance of the Australian economy, and hence the AUD, which should have also been included in your coverage. Then, give an in-depth analysis of your transactions/trading performance. 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