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FINC13-304: Financial Markets and Institutions September 2019 [Standard]

General information

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. 

Details

Academic unit:Bond Business School
Subject code:FINC13-304
Subject title:Financial Markets and Institutions
Subject level:Undergraduate
Semester/Year:September 2019
Credit points:10

Delivery & attendance

Timetable: https://bond.edu.au/timetable
Delivery mode:

Standard

Workload items:
  • Lecture: x12 (Total hours: 24) - Weekly Lecture
  • Tutorial: x12 (Total hours: 24) - Weekly Tutorial
  • Personal Study Hours: x12 (Total hours: 72) - Study time and reviewing materials
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible.

Resources

Prescribed resources:
  • Christopher Viney,Viney Phillips,Peter J. Phillips (2015). Financial Institutions Instruments and Mar. 8th,
[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

Enrolment requirements

Requisites: ?

Nil

Restrictions: ?

Nil

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.

Find your program

Subject Learning Outcomes (SLOs)

On successful completion of this subject the learner will be able to:
  1. Describe the key concepts and theorems of capital markets, institutions and securities including equity, fixed income securities and derivative products.
  2. Apply knowledge of financial markets and securities to critically analyse risk management and performance in financial institutions.
  3. Apply value at risk techniques and optimal hedging strategies with derivative products to conduct risk analysis in the global financial markets to the benefit of relevant stakeholders.
  4. Produce a clear and concise written report that provides clear analysis and recommendations regarding an advanced issue of risk management in a financial institution.
  5. Demonstrate the ability to work in a team to produce a professional report regarding an advanced issue of risk management in a financial institution.

Assessment

Assessment details

TypeTask%Timing*Outcomes assessed
Tutorial Activity Tutorial activity 5% Weekly 1, 2, 3, 4.
Written Report § Risk management report 25% Week 12 2, 3, 4, 5.
Paper-based Examination (Closed) Comprehensive final examination 40% Final Examination Period 1, 2, 3.
Paper-based Examination (Closed) Mid-semester Examination 30% Week 7 (Mid-Semester Examination Period) 1, 2.
  • § Indicates group/teamwork-based assessment
  • * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
  • C = Students must reach a level of competency to successfully complete this assessment.

Assessment criteria

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.

Quality assurance

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.

Study information

Submission procedures

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.

Bond University utilises Originality Reporting software to inform academic integrity.

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.

Disability 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

A peer evaluation system will be used in this subject to help determine the individual marks for all group assessments. As part of the requirements for Business School quality accreditation, the Bond Business School employs 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. 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.

Subject curriculum

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.

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.

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.

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.

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.

An introduction to the concepts of futures and forwards and their differences. Introduction to arbitraging futures contracts.

This topic provides an introduction to Options, including the mark to market mechanism and the arbitraging option contract.

Investigates the concept and rationale underlying swaps, including the notions of comparative and absolute advantage and determining the cash flow of swaps.

The role and impact of regulation in the financial market.

Approved on: Jun 28, 2019. Edition: 4.5
Last updated: Mar 2, 2020.