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FIN8202 Financial Markets and Instruments

Semester 2, 2013 On-campus Toowoomba
Units : 1
Faculty or Section : Faculty of Business and Law
School or Department : School of Accounting, Economics and Finance
Version produced : 21 July 2014

Contents on this page

Staffing

Examiner: Chandrasekhar Krishnamurti
Moderator: David Troedson

Requisites

Pre-requisite: FIN8201

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.

Rationale

A study of financial markets and instruments involves an examination of the working of different types of financial markets and the characteristics of the different instruments used by companies and governments. A clear understanding of financial markets and instruments is essential for the practising finance manager. It would help him/her to effectively manage risk, raise new capital, and invest surplus funds. These concepts are also invaluable for financial service professionals and fund managers.

Synopsis

This course examines the structure, operation and performance of the global financial system, using principles of financial and monetary economics. Students are introduced to a selection of financial markets, institutions and instruments, the operations of which largely determine key financial variables that affect decisions to save and invest in the real economy. The main components of the Australian financial system and how they relate to major markets in the world are explained. In addition, a number of uniquely international financial institutions are examined, and a number of contemporary topics such as the recent global financial crisis are discussed.

Objectives

On successful completion of this course, students should be able to:

  1. apply basic financial economic theoretical skills to explaining the workings of the domestic and international financial systems
  2. demonstrate a working knowledge of the institutional framework for financing economic activity by applying it to specific settings
  3. discuss issues covering the monitoring, regulation, structure, conduct and performance of both the domestic and international financial system
  4. demonstrate a working knowledge of the financial products that are available and their applications
  5. acquire an introductory understanding of risk management concepts and apply it to specific settings
  6. demonstrate an ability to effectively communicate the results of an analysis
  7. demonstrate the creativity required of a financial services professional through innovative and original analysis and reporting.

Topics

Description Weighting(%)
1. Introduction to financial markets and institutions; financial calculations 5.00
2. Commercial banking 10.00
3. Interest rates, yield curve and monetary policy 15.00
4. Debt securities and markets 10.00
5. Interest rate risk management 15.00
6. Money markets 10.00
7. Equity markets 15.00
8. Foreign exchange markets 10.00
9. Contemporary issues in finance 10.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (https://bookshop.usq.edu.au/bookweb/subject.cgi?year=2013&sem=02&subject1=FIN8202)

Please contact us for alternative purchase options from USQ Bookshop. (https://bookshop.usq.edu.au/contact/)

  • Berk, J, DeMarzo, P, Harford, J, Ford, G & Finch, N 2011, Fundamentals of corporate finance, Pearson Australia, Frenchs Forest, New South Wales.
    (chapter 13 only.)
  • Mishkin, FS & Eakins, SG 2012, Financial markets and institutions, 7th edn, Pearson Education, Edinburg Gate, England.
    (chapters 4 - 6, 8, 11, 13, 15, 16, 23 and 24 only.)
  • Valentine, T, Ford, G, O’Hara, L & Sundmacher, M 2011, Fundamentals of financial markets and institutions in Australia, Pearson, Frenchs Forest, New South Wales.
    (chapters 1 - 5, 7, 9, 12 and 14 only.)
  • Readings from a custom publication: FIN8202 Financial Markets and Instruments, 2013 – compiled for the University of Southern Queensland by Chandrasekhar Krishnamurti, Pearson Australia. Alternately, one can purchase the text books. The relevant chapters are shown in parenthesis.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
  • Brealey, R, Myers, S & Allen, F 2010, Principles of corporate finance, 10th edn, McGraw-Hill/Irwin, New York.
  • Frino, A, Chen, Z & Hill, A 2009, Introduction to corporate finance, 4th edn, Pearson Education, Frenchs Forest, New South Wales.
  • Hunt, B, & Terry, C 2011, Financial institutions and markets, 6th edn, Cengage Learning Australia, Melbourne, Victoria.
  • Kidwell, D, Brimble, M, Basu, A, Lenten, L & Thompson, D 2011, Financial markets, institutions and money, 2nd edn, John Wiley & Sons, Australia.
  • Madura, J 2010, Financial markets and institutions, 9th edn, South-Western Cengage Learning, Mason, Ohio.

Student workload requirements

Activity Hours
Assessments 40.00
Directed Study 75.00
Private Study 50.00

Assessment details

Description Marks out of Wtg (%) Due Date Notes
ONLINE CMA TEST 100 30 23 Aug 2013 (see note 1)
WRITTEN ASSIGNMENT 100 20 13 Sep 2013 (see note 2)
2-HOUR EXAMINATION 100 50 End S2 (see note 3)

NOTES
  1. The online computer-marked answer test will comprise multiple choice/true false questions on a set of modules covered during the first half of the semester.
  2. The written assignment (essay) will require students to research a given contemporary topic and analyse critically a set of issues. It will test students' ability to understand the complexities of global markets and institutions and provide critical analysis.
  3. The examination is scheduled to be held in the end-of-semester examination period. Students will be advised of the official examination date after the timetable has been finalised. It will comprise critical analysis, problem-solving questions as well as questions involving student's ability to communicate insights from financial analysis.

Important assessment information

  1. Attendance requirements:
    It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    If students submit assignments after the due date without prior approval of the examiner, then a penalty of 5% of the total marks gained by the student for the assignment may apply for each working day late up to ten working days at which time a mark of zero may be recorded.

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    This will be an open examination. Candidates may have access to any printed or written material and a calculator during the examination.

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at http://policy.usq.edu.au.

Assessment notes

  1. Assignments:
    1. The due date for an assignment is the date by which a student must despatch the assignment to the USQ. The onus is on the student to provide proof of the despatch date, if requested by the examiner.
    2. If requested, students will be required to provide a copy of an assignment submitted for assessment purposes. This should be despatched to the USQ within 24 hours of receipt of a request being made.
    3. In accordance with university policy, the examiner may grant an extension of the due date of an assignment in extenuating circumstances.
    4. Assignments are to be submitted in the appropriate assignment folders.
    5. The examiner will normally only accept assessments that have been written, typed or printed on paper-based media.
    6. The examiner will not accept submission of assignments by facsimile.
    7. Students who do not have regular access to postal services or who are otherwise disadvantaged by these regulations may be given special consideration. They should contact the examiner to negotiate such special arrangements.
    8. In the event that a due date for an assignment falls on a local public holiday in their area, such as a show holiday, the due date for the assignment will be the next day. Students are to note on the assignment cover the date of the public holiday for the examiner's convenience.


  2. Referencing in assignments:
    Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at http://www.usq.edu.au/library/referencing.

  3. Course weightings:
    Course weightings of topics should not be interpreted as applying to the number of marks allocated to questions testing those topics in an examination paper. The examination may test material already tested in assignments.

  4. Deferred work:
    Students who, for medical, family/personal, or employment-related reasons, are unable to complete an assignment or to sit for an examination at the scheduled time may apply to defer an assessment in a course. Such a request must be accompanied by appropriate supporting documentation. One of the following temporary grades may be awarded: IDS (Incomplete - Deferred Examination); IDM (Incomplete Deferred Make-up); IDB (Incomplete - Both Deferred Examination and Deferred Make-up).

  5. Make-up work:
    Students who have undertaken all of the required assessments in a course but who have failed to meet some of the specified objectives of a course within the normally prescribed time may be awarded the temporary grade: IM (Incomplete - Make up). An IM grade will only be awarded when, in the opinion of the examiner, a student will be able to achieve the remaining objectives of the course after a period of non-directed personal study.

  6. Dishonest actions:
    1. Any student who is alleged to have performed a dishonest action relating to any assessment in the course will have a course of action taken against him/her as outlined in the academic regulations.
    2. Pieces of assessment should be the work of individual students. Joint pieces of assessment are not permitted unless written approval has been obtained from the examiner.
    3. Dishonest action in relation to assessment includes: copying or attempting to copy the work of others; use of or attempting to use information prohibited from use in that form of assessment; submitting the work of another as your own; consciously committing acts of plagiarism, that is, taking and using another's thoughts or writings as one's own with intent to deceive, which occurs when paragraphs, sentences, a single sentence or significant parts of a sentence which are copied directly, are not enclosed in quotation marks and appropriately footnoted or referenced in the text; direct quotations are not used, but text is paraphrased or summarised, and the source of the material is not acknowledged by footnoting or other reference in the text.


Other requirements

  1. Computer, e-mail and Internet access:
    Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.