An introduction to the nature and function of financial markets and institutions. The emphasis of this subject is on understanding how markets work, how instruments are priced and how they are traded. The evolution of financial institutions both in Australia and internationally, their roles and response to regulations and deregulation are also explored.
Academic unit: Bond Business School Subject code: FINC71-604 Subject title: FINC71-604: Capital Markets Subject level: Postgraduate Semester/Year: May 2018 Credit points: 10.000
Delivery & attendance
Timetable: https://bond.edu.au/timetable Delivery mode: Standard Workload items:
- Lecture: x12 () - Weekly Lecture
- Tutorial: x12 () - Weekly Tutorial (Note this class commences in Week 2)
- Personal Study Hours: x12 () - Recommended study time & reviewing materials
Attendance and learning activities:
- Christopher Viney,Viney Phillips,Peter J. Phillips (2015). Financial Institutions Instruments and Mar. 8th, McGraw-Hill Education (Australia)
- David S. Kidwell,Mark Brimble,Liam J. A. Lenten,Anup Basu,Paul Docherty,Paul Mazzola Financial Markets, Institutions and Money. 3rd,
- A. K. Bera and M. L. Higgins. (1993). ARCH models: properties, estimation and testing. J. Economic Surveys 20 Available at: http://stats.lse.ac.uk/fryzlewicz/lec_notes/garch.pdf
[email protected] & Email: [email protected] is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student.
To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au
|Academic unit:||Bond Business School|
|Subject title:||FINC71-604: Capital Markets|
|Attendance and learning activities:|
|[email protected] & Email:||[email protected] is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student.
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge.
Assumed Prior Learning (or equivalent):
Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Describe the key concepts and theorems of capital markets, institutions and securities including equity, fixed income securities and derivative products.
- Apply advanced knowledge of financial markets and securities to critically analyse risk management and performance in financial institutions.
- Apply the techniques covered in this subject including value at risk and optimal hedging strategies with derivative products to conduct risk analysis in the global financial markets to the benefit of relevant stakeholders.
- Produce a clear and concise written report that provides clear analysis and recommendations regarding an advanced issue of risk management in a financial institution.
- Demonstrate the ability to work in a team to produce a professional report regarding an advanced issue of risk management in a financial institution.
Type Task % Timing Outcomes assessed Paper-based Examination (Closed) Comprehensive final examination 40% Final Examination Period 1,2,3 Paper-based Examination (Closed) Mid-semester Examination 30% Week 6 (Mid-Semester Examination Period) 1,2 Written Report Risk management report 20% Week 10 2,3,4,5 Activity n/a 10% Weekly 1,2,3,4
High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment. Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines.
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
|Paper-based Examination (Closed)||Comprehensive final examination||40%||Final Examination Period||1,2,3|
|Paper-based Examination (Closed)||Mid-semester Examination||30%||Week 6 (Mid-Semester Examination Period)||1,2|
|Written Report||Risk management report||20%||Week 10||2,3,4,5|
Students must check the [email protected] subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless an extension is granted by the subject coordinator. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Policy on plagiarism
University’s Academic Integrity Policy defines plagiarism as the act of misrepresenting as one’s own original work: another’s ideas, interpretations, words, or creative works; and/or one’s own previous ideas, interpretations, words, or creative work without acknowledging that it was used previously (i.e., self-plagiarism). The University considers the act of plagiarising to be a breach of the Student Conduct Code and, therefore, subject to the Discipline Regulations which provide for a range of penalties including the reduction of marks or grades, fines and suspension from the University.
Feedback on assessment
Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.
Accessibility and Inclusion Support
If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.
Additional subject information
This subject will make use of the R programming language, which is fully open-source. RStudio is the recommended front-end and is also freely available.
Overview of a Modern Financial System
Introduction to the elements and functions of a financial system, the flow of funds between savers and borrowers and the main classes of financial instruments used. Also considers the distinction between various types of financial markets.
Overview of the role of financial intermediaries within the financial system. Comparison of money markets versus capital markets, debt markets versus equity markets and primary versus secondary markets.
Examines the operation of equity markets, how stock exchanges are regulated and the importance of market efficiency. Also considers equity valuation and the role of private equity.
Short Term Debt
Examines a variety of short-term debt facilities including single loans, lines of credit, revolving credit agreements and discounted loans.Overview of the short-term debt pricing model.
Continues the discussion of debt instruments with an explanation of long-term debt facilities such as corporate bonds, direct placement and securitisation. Describe the long-term debt pricing model in contrast to the short-term version.
Interest Rate Determination
Explores the relationship among yields of different maturities of the same type of security. Introduction of the three-term structure theories -- Pure Expectations Theory, Liquidity Premium Theory and Segmented Market Theory.
Risk and Financial Market Volatility
Considers the concept of volatility in financial markets, the Autoregressive Conditional Heteroscedasticity (ARCH) and Generalised Autoregressive Conditional Heteroscedasticity (GARCH) approaches to estimating it and the difference between historical volatility and implied volatility. Provides an analysis of the different approaches to measuring value at risk.
Futures and Forwards
An introduction to the concepts of futures and forwards and their differences. Introduction to arbitraging futures contracts.
Introduction to Options and mark to market mechanism and the arbitraging option contract.
The concept and rationale underlying swaps, including the notions of comparative and absolute advantage. Determining the cash flow of swaps.
Regulation and Deregulation
The role and impact of regulation in the financial market.