SOUTHEAST UNIVERSITY School of Business Studies, BBA Program Course Title: Financial Markets & Institutions Course Code: FIN 4140 Semester: Summer, 2014 Section: C Instructor: Mohammad Kamrul Arefin (KRL) Class Time: ST 2:30PM – 3:50 PM Office: Office hours: ST 4:00 PM-5:00PM Class Room: e-mail: [email protected] Office Phone: 01833179916 Web: www.mkarefin.weebly.com ================================================================================ COURSE DESCRIPTION & OBJECTIVES: This course will provide conceptual knowledge of financial markets, why it exists and how different financial institutions, like banks, security services, mutual funds, insurance companies etc., play key role in the financial markets. TEACHING APPROACH: The class will meet for a total of 36 hours divided into 24 x 1.5 hours lectures. The classes will be conducted through lectures, and presentations. Students are required to take notes, answer questions, and participate actively in the class. Students are strongly encouraged to communicate with the lecturer through email or phone and meet lecturer during office hour (outside office hour by prior appointment) for any questions they may have. TEXT BOOK: Jeff Madura (2006). Financial Markets and Institutions, 7th Edition, Thomson SouthWestern. LECTURE OUTLINE: Lecture 1-3 4-6 7-8 9-11 12-14 Topics Role of financial markets and institutions: Overview of financial markets, securities traded in financial markets, valuation of securities in financial markets, financial market regulations, role of financial institutions in financial markets. Determination of interest rates: loan-able funds theory, economic forces that affect interest rates, forecasting interest rates. Structure of interest rates: factors affecting interest rates/yields, explaining yield differentials, estimating the appropriate yield, term structure of interest rates. Monetary theory and policy: pure Keynesian theory, Quantity theory and the monetarist approach, theory of rational expectations, economic indicators monitored by central bank, etc. Mid Term 1 Money markets: Money market securities, institutional use of money markets, valuation of money market securities, risk of money market securities, interaction among money market yield. Bond valuation and risks: bond valuation process, relationship between coupon rate, required return, and bond price, explaining bond price movement, sensitivity of bond price movement with interest rate movement, return and risk of bonds. 1 15-16 17-19 Chapter 17 20-22 Chapter 18 23-24 Chapter 24 Mortgage markets: Background of mortgages, mortgage financing, valuation of mortgages, risk from investing in mortgage. Mid Term 2 Stock valuation and risk: Stock valuation method, determining required rate of return to value stock, factors that affect stock price, stock risk, forecasting stock price volatility and beta, stock performance measurement, stock market efficiency Financial futures markets: background of financial futures, valuation of financial futures, explaining price movement of bond futures contract, speculation with interest rate futures, hedging with interest rate futures, risk of trading futures contract. Commercial bank operations: Bank participation in financial conglomerates, bank sources of fund, uses of funds by banks, off balance sheet activities. Final Exam TBA EXAMS: There will be a total of 3 exams and the syllabus for final exam will be comprehensive. COURSE GRADING COMPONENTS: Component/Coverage Mid Term 1 Mid Term 2 Final Exam Group Report Class Participation Weights (%) 25 25 25 20 5 Financial Market Analysis Project: At the end of this course students are expected to submit a Financial Market Analysis report and 10% marks per day will be deducted for late submission of the project report. This will be a group project. This project helps students to implement their learning from this course and improve their report writing skills. The task in this project can be categorized as follows: 1) Prospects and challenges in Bangladesh Financial Market 2) Measuring Stock Performance For task 1, students are required to find brief history of Bangladesh Financial Markets and the key players of this market. Students also have to report future prospects and challenges in this market with suggestions. For task 2, each group will be assigned a listed company in the stock exchange to perform stock performance analysis on that company. Students are required to collect financial performance data of 4 other vital listed competitors in the same industry and perform a comparative stock performance analysis. 2 According to South East University grading policy, the following is a suggested conversion scheme: A+ 80 A 75 A70 B+ 65 B 60 B55 C+ 50 C 45 D 40 F <40 COURSE POLICY:  It is important that you attend classes regularly. In-class participation is a key component of the course.  Please bring scientific calculator with you in every classes.  You will not be allowed to take any make-up exam unless you provide evidence of a valid reason. You are expected to inform the lecturer at least 12 hours prior the exam about your incapacity. The make-up diet of the exam will be harder than the regular exam and it will be comprehensive.  Any type of plagiarism will result in F (Fail) grade in the course. Please do not use cell phones in the exam. If you get caught having cell phone switched on during exam then you will be convicted for plagiarism.  Please turn all cell phones on silent mode before entering the class. If you are to take the call then leave the class silently without asking permission.  The number of groups in the class may vary according to the total number of students.  The instructor and university reserve the right to modify elements of the course during the term. It is the responsibility of the student to check their emails, Southeast University website and instructor’ website regularly during the term to note any changes. GOOD LUCK 3