FINANCE 4400.002

FINANCIAL MARKETS AND INSTITUTIONS

SPRING 2005

Dr. Steve Cole

Business Administration 155G

Office Hours: WR 5:00P - 6:00P Denton Campus

T 5:00P - 6:00P Dallas Campus

Office Telephone: (940) 565-3075

Fax: (940) 565-4234

E-mail: CSCole@UNT.EDU

Mailing Address

Department of Finance, Insurance, Real Estate, and Law

College of Business Administration

University of North Texas

P.O. Box 305339

Denton, Texas 76203-5339

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PURPOSE OF THE COURSE

This course is designed to expose the student to the different financial markets and the institutions that are active in these financial markets. In addition, the course will provide information regarding the characteristics of various financial instruments (contracts) that are created and traded in these financial markets. The course emphasizes the characteristics of debt instruments, including how they are priced and traded and the various risks associated with these instruments.

UNT COURSE CATALOG DESCRIPTION

FINA 4400: Financial Markets and Institutions: Studies in the operations, mechanics, and structure of the U.S. financial system. Topics include commercial banking, non-bank financial institutions, money and capital markets, the impact of monetary policy on financial institutions and markets, and an introduction to the international financial system.

PREREQUISITES

Required: FINA 3770 with a grade of C or better.

COURSE OBJECTIVES

The major course learning objective is to prepare you to be able to analyze and explain the implications of articles presented in popular financial publications for the rest of your life. By the end of the course, you will be able to (1) explain how economic problems solved by the financial system result in instruments that transfer cash flows over time and transfer risks among market participants; (2) model risk and return relationships among financial institutions, their financial instruments, and their investors; (3) discuss how and why investment decisions trade risk for return; (4) analyze, price, and explain common useful financial contracts that reflect the characteristics of alternative markets and institutions, such as those contracts quoted daily in The Wall Street Journal, and (5) identify those financial instruments that are held by select financial institutions, as well as, those instruments that are issued by select participants in the financial marketplace. It is my opinion that students attend a university to better themselves and to prepare for a more fulfilling life. The university experience helps in the development of human capital which contributes to rewarding and productive career opportunities.

TEXTS

Saunders, Anthony and Marcia Millon Cornet, Financial Markets and Institutions: A Modern Perspective Second Edition, McGraw-Hill Irwin 2004.

The Wall Street Journal

READING AND TOPICS SCHEDULE

I reserve the right to alter this schedule of topics other than the scheduled exams.

RECOMMENDED STUDY STRATEGY

Attend class faithfully and take notes. Read the chapter after the lecture. Recopy your notes into another notebook. While recopying you can rephrase your notes and expand them based on your chapter reading. At this time mark any questions that you might generate to be either asked in class or discussed with me during officer hours. By now, as upper-level students, you realize that your scholastic performance is directly related to the time and effort that you put into the class. As an instructor, it is difficult for me to steer a parked car. You need to get moving on your own. Show some initiative; it will pay off.

While recopying or rephrasing, the following list of suggestions may assist you in your study:

•        translate ideas into you own words

•        find and correct errors (ask me in a later class, or see me in my office, if you are unsure, or ask a fellow student if they discovered the same error)

•        summarize key ideas if not done by the me in class

•        link material to previously learned material covered in class

•        link material to your work and life experience

•        link material to the textbook pages

EXAMS

There will be three (3) exams: two regular semester exams and a comprehensive final. Each exam will be worth 100 points. These exams will be administered at the times shown on this syllabus with no exceptions. Exams will cover the text, lecture, and any additional material assigned in class. Exams will consist of multiple choice and true/false questions along with problems that will be solved directly on the exams.

Any student late for an exam will not be given extra time to complete the exam. Once an exam has started, no student may leave the examination room without the proctor’s permission and/or until he or she has finished the exam and turned it in to the exam proctor.

No hats, headsets, or programmable devices are allowed during exams.

Exams are graded without my knowledge of whose exam is being graded. Please bring obvious math errors to my attention at the time exams are returned. Other differences over how an exam was scored will not be discussed in class. Please write your comments regarding possible discrepancies on the exam and return it to me for further consideration. If this does not resolve the difference, please see me in my office.

REFERENCE SHEETS

These can be handwritten or computer generated hard copies. You can not staple, or attach pieces of paper together to create this reference sheet. You can use any size font on your PC to create this sheet.

Size: One standard page for each test and for the final exam is the most you can use.

DO NOT COPY ANOTHER PERSON’S REFERENCE SHEET. Create your own. Start now, identify each area that you think you are weak in, and keep a folder in which you write these down to make up your reference sheet. A properly prepared reference sheet is an excellent study tool.

WALL STREET JOURNAL QUIZZES

During the course of the semester, seven quizzes will be given covering assigned articles from The Wall Street Journal. The purpose of these articles is to expose the student to current business press coverage pertinent to our study of financial markets and information during the semester. The best five of the quizzes will be kept and their cumulative scores will count equivalent to a major exam or 100 points. Students must have regular access to The Wall Street Journal. A subscription is not required; but regular access is necessary.

GRADES

The grades will be based on a 300 point scale determined as follows:

         First Exam                                 -- 100 points

         Second Exam                             -- 100 points

         Wall Street Journal quizzes          – 100 points

         Final Exam                                -- 100 points

            Total                                      -- 400 total points

It will take at least 360 points for an A, 320 for a B, 280 for a C, and 240 for a D. The above scale may be revised downward at my discretion. Information on course grades will be received through normal university channels with no exceptions. Accordingly, I do not post grades, mail cards with grades on them, report grades via the telephone, or report a grade to a student that stops by my office.

CALCULATORS

You may use a calculator (of your choice) on each of the exams. I will use the Texas Instruments BA II PLUS in class. If you do not already have a financial calculator, this is an excellent choice.

INCOMPLETE

I will adhere to University policy as stated in the Undergraduate Catalog under the heading of Grading System regarding the assignment of a grade of Incomplete. Unless you are in compliance with University policy do not ask me to assign a grade of incomplete.

CLASSROOM ETIQUETTE

 At this level in the education process a few rules of classroom etiquette should be understood:

1.      The University catalog requires regular and punctual class attendance as describe under the heading Class Attendance. I have no attendance policy, but I do expect punctuality. Consistent tardiness is rude to the rest of the class and inappropriate. It will not be tolerated and I may refuse admittance to the classroom.

2.      It is, also, rude and inappropriate to conduct private conversations with your neighbor during class. I am capable of creating enough confusion without assistance.

3.      Keep your attention focused on this class when you are here. Do not attend this class and then, while in here, study another subject, read the newspaper, sleep, etc.

4.      Feel free to share your thoughts and ideas. Understand that everyone has an opinion. You may challenge mine, or anyone else’s, but please do so in a professional manner.

These simple rules are for the benefit of the entire class. Please adhere to them.

DISABLED STUDENTS

I comply with the Americans with Disabilities Act in making reasonable accommodation for qualified students with disability. If you have an established disability as defined in the Americans with Disabilities Act and want to request accommodation, please see me as soon as possible.

ACADEMIC ETHICS

You are encouraged to become familiar with the University’s Policy of Academic dishonesty found in the Student Handbook. The content of the Handbook applies to this course. Additionally, the following specific requirements will be expected in this class:

The term “cheating” includes, but is not limited to, (1) use of any unauthorized assistance in taking quizzes, tests or examinations; (2) dependence upon the aid of sources beyond those authorized by me in writing papers, preparing reports, solving problems, or carrying out other assignments; or (3) the acquisition, without permission, of tests or other academic material belonging to a faculty member or staff of the university. It also includes the unauthorized preparation of notes for use on examinations, use of such notes during an examination, looking at another student’s examination answers, allowing another student to look at your own examination answers, or the requesting or passing of information during an examination.

CLASSROOM LECTURE AND HANDOUTS

It is your responsibility to obtain all relevant information provided in class, including any handouts, even if you are absent. I will neither provide handouts, other than the day they were originally distributed, nor provide lecture notes or individual tutoring, regardless of the reason for the absence. Do not ask me what took place in class or ask me what will be on the exams. Feel free at any time to ask me questions about the course material; however, I will not provide "summaries" for those who have not attended class.

MISCELLANEOUS

I do not give additional projects to increase one’s grade before or after the final exam.

You may audio-tape my lecture.

This is a senior level finance course and demands a high level of commitment by the student. Start working hard, immediately. I am a human and I will make errors. When this happens please bring it to my attention. I promise you that I will come to class prepared. I expect the student to do likewise.

As a student, you are expected to read this syllabus and understand its contents.