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The current and official versions of the course specifications are available on the web at http://www.usq.edu.au/course/specification/current.
Please consult the web for updates that may occur during the year.

FIN2302 Financial Economics

Semester 1, 2019 On-campus Springfield
Short Description: Financial Economics
Units : 1
Faculty or Section : Faculty of Business, Education, Law and Arts
School or Department : School of Commerce
Student contribution band : Band 3
ASCED code : 081101 - Banking and Finance
Grading basis : Graded

Staffing

Examiner: David Troedson

Requisites

Pre-requisite: ECO1000 and FIN1101 and FIN1103 and STA2300

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

Students and practitioners of finance need an up to date course that aids them in gaining a deeper understanding of the modern world of finance. Accordingly this course will emphasise the learning and application of basic analytical concepts. The course assumes some background knowledge in finance and statistics. See the course pre-requisites.

Synopsis

Financial Economics is a course in economic theory and relevant applications for finance students. It draws upon well-established microeconomic theory, which helps to provide an understanding of the interactions between agents and markets within the global financial system. The course also develops macroeconomic theory that directly relates to the monetary and banking system. A solid foundational understanding of financial economics is critical for students to develop core competency in finance.

Objectives

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

  1. Synthesise knowledge, concepts, theories, and processes pertaining to the functioning of financial institutions, financial regulation, financial structure, financial risk management and the impact of economic policy on the financial system
  2. Use critical thinking skills to constructively and logically solve issues, problems, and engage in theoretical debates about transaction costs, economies of scale, adverse selection, moral hazard, the principal agent problem, the term structure of interest rates and the conduct of central banks
  3. Apply economic and financial knowledge and technical skills to determine the likely impacts of government policy and the interplay of demand and supply factors on key economic metrics including interest rates and inflation
  4. Apply the literacy and numeracy skills required of financial services professionals, when interpreting the variety of written and graphical information to explain the rationale and impacts of financial policy and regulations, and undertake a range of calculations facing managers of financial institutions.

Topics

Description Weighting(%)
1. Money, banking, and financial markets 10.00
2. Interest rate determination and behaviour 10.00
3. Term structure of interest rates 10.00
4. Rational expectations, behavioural finance, and efficient markets hypothesis 10.00
5. Economic analysis of financial structure 8.00
6. Financial crises 12.00
7. Banking 10.00
8. Economic analysis of conflicts of interest and financial regulation 10.00
9. Financial engineering 10.00
10. Central banking and the conduct of monetary policy. 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://omnia.usq.edu.au/textbooks/?year=2019&sem=01&subject1=FIN2302)

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

Mishkin, F 2018, The Economics of Money, Banking and Financial Markets, Global Edition, 12th edn, Pearson Education Limited, Great Britain.
(Students, if they have already purchased a copy, may use the previously used text "Mishkin, F 2014, The economics of money, banking, and financial markets, The Business School Edition, 3rd edn, Pearson New International Edition, Pearson Education, Essex".)

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.
Hunt, B & Terry, C 2015, Financial institutions and markets, 7th edn, Cengage Learning, South Melbourne, Victoria.
Malkiel, B 2012, A random walk down Wall Street, 10th revised edn, Norton, New York.
Mishkin, F & Eakins, S 2018, Financial markets and institutions, Global 9 edn, Prentice Hall, Boston, Massachusetts.
Norberg, J 2009, Financial fiasco: how America’s infatuation with home ownership and easy money created the economic crisis, Cato Institute, Washington DC.
(electronic resource.)
Reinhart, C & Rogoff, K 2009, This time is different: eight centuries of financial folly, Princeton University Press, Princeton, New Jersey.
(electronic resource.)
Shiller, R 2015, Irrational exuberance, 3rd edn, Princeton University Press, Princeton, New Jersey.
(electronic resource.)
Viney, C & Phillips, P 2015, Financial institutions, instruments and markets, 8th edn, McGraw Hill, Sydney, New South Wales.

Student workload expectations

Activity Hours
Directed Study 36.00
Independent Study 124.00

Assessment details

Description Marks out of Wtg (%) Due Date Notes
QUIZ 1 15 15 07 Jun 2019 (see note 1)
QUIZ 2 25 25 07 Jun 2019
EXAMINATION 60 60 End S1 (see note 2)

Notes
  1. Two online quizzes will be conducted during the semester. Further details will be provided on the course Study Desk.
  2. This is a restricted examination. The total working time for the examination is 2 hours. The examination date will be available via UConnect when the official examination timetable has been released.

Important assessment information

  1. Attendance requirements:
    Online: There are no attendance requirements for this course. However, it is the students' responsibility 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.

    On-campus: 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:
    Students should refer to the Assessment Procedure http://policy.usq.edu.au/documents.php?id=14749PL (point 4.2.4)

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must obtain at least 50% of the total weighted marks available for the course (i.e. the Primary Hurdle), and have satisfied the Secondary Hurdle (Supervised), i.e. the end of semester examination by achieving at least 40% of the weighted marks available for that assessment item.

    Supplementary assessment may be offered where a student has undertaken all of the required summative assessment items and has passed the Primary Hurdle but failed to satisfy the Secondary Hurdle (Supervised), or has satisfied the Secondary Hurdle (Supervised) but failed to achieve a passing Final Grade by 5% or less of the total weighted Marks.

    To be awarded a passing grade for a supplementary assessment item (if applicable), a student must achieve at least 50% of the available marks for the supplementary assessment item as per the Assessment Procedure http://policy.usq.edu.au/documents/14749PL (point 4.4.2).

  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 is a restricted examination. Candidates are allowed access to specific materials during the examination. The only materials that candidates may use in the examination for this course are:
    1. writing materials (non-electronic and free from material which could give the student an unfair advantage in the examination)
    2. calculators which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).
    Students are not permitted to take mobile telephones, pagers or other electronic means of communication into the examination room.

  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. 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.