FINA 5410 OFFICE: BA 155-G

ADVANCED MANAGEMENT OF

FINANCIAL INSTITUTIONS

SPRING 2008 PHONE: (940) 565-3075

DR. STEVE COLE CSCOLE@UNT.EDU *

DEPARTMENT FAX (940) 565-4234 *Preferred Contact Method

OFFICE HOURS

Denton Campus

5:00p.m.- 6:00p.m. WR

Frisco

5:30p.m. - 6:30p.m. M

TEXTS:

Financial Institutions Management: a risk management approach, 6th Edition, Anthony Saunders and Marcia Millon Cornett, Irwin-McGraw Hill, 2008.

The Wall Street Journal

OTHER READINGS:

Other readings in the class will consist of handouts that will be provided by me . Our textbook is very good, but I expect you to be familiar with current world and national developments and how such events will impact financial institutions. Applying your knowledge to real world events develops your critical thinking skills thus helping you learn about financial institutions, their risks, and mitigation of those risks.

COURSE OBJECTIVES:

The student is expected to have knowledge of financial management and financial markets and institutions. It is the goal of this course to explore the management of financial institutions. During the course the student will be exposed to the various risks faced by modern financial institution managers. Additionally, some tools and policies for identifying, measuring, and mitigating these risks will be examined. These objectives will be met through a program of readings, lecture, discussion, and individual study.

CATALOG DESCRIPTION:

Current problems and issues in the management of financial institutions are covered in readings, case problems and computer simulation models.

PREREQUISITES:

FINA 5400 may be taken concurrently with FINA 5410.

EXAMS

During the semester there will be two scheduled exams each worth 15% of the course grade and a comprehensive final worth 25% of the course grade. If either of the two scheduled exams is missed, for whatever reason, the comprehensive final will count as 40% of the course grade. If the final exam percentage score is higher than either of your scheduled semester exam percentage scores, I will substitute it for the lower schedule semester exam score when calculating your course percentage. The exams will be given only on the dates scheduled with no exceptions. Make-up exams will be given only for official University authorized absences (See Graduate Catalog.) The exams will be a mix of objective questions, consisting of multiple choice and true/false question, and subjective questions, which will be made up of short answer questions including problems. The material covered in class will be weighted most heavily on exams. However, material assigned in the book and on handout sheets which is not covered in class is eligible for coverage on the exams. The Grade Components are summarized under COURSE GRADES below.

Information about the exams is summarized as follows:

• Major focus is on chapter concepts, problems worked in class and analytical solutions.

• Each scheduled exam and the comprehensive final is worth 100 points.

• If the final exam percentage score is higher than either of your scheduled semester exam percentage scores, I will substitute it for the lower scheduled semester exam score when calculating your course percentage.

• Make-up exams will be given only for official University authorized absences.

• No make-up WSJ quizzes will be given.

CALCULATORS :

For exam purposes, each student must have access to a dependable calculator. The calculator must have a either a ^X√y key or a 1/X key together with a y^xkey. A calculator with a numeric memory is also helpful in solving finance problems. Programmable calculators may not be used for any in-class exams.

I will use a Texas Instruments BA-II plus in class. I recommend the Texas Instruments BA-II plus. However, at this point in your finance education you should have acquired and gained familiarity with a financial calculator. There are a number of good calculators on the market including the BA-II plus. All these financial calculators have N, I, PV, PMT, and FV functions.

Students may use one 8½X11 reference sheet (both sides) in solving the exams. It is intended that this reference sheet be a study enhancement; therefore, each student must prepare his/her own reference sheet for each exam. Copies of reference sheets are not allowed.

THE WALL STREET JOURNAL:

The Journal is a good way to begin a lifelong pattern of professional reading. We will be discussing significant financial events as they occur. In addition, I will assign articles from The Wall Street Journal relative to these events. During the semester a series of seven quizzes will be given over these assigned articles. The best five scores will count equivalent to a scheduled exam score and will count as 15% of your course grade. No make ups will be given for missed WSJ quizzes. A Missed quiz will count as one of the two dropped low scores. Each student must have regular dependable access to The WSJ during the semester. An opportunity to subscribed will be provided in class at the beginning of the semester. In addition, you may sign up for The Wall Street Journal at http://wsjstudent.com. The UNT library subscribes to The WSJ so you can read it there for free. Many of you, also, have access to it at your places of employment. I recommend that you subscribe or get into the habit of reading a business daily or a business weekly publication regularly. One of the major problems in learning Finance is understanding the business terminology and becoming comfortable with the jargon. Repeated exposure helps alleviate this problem. If you want to major in Finance, recognize that Finance professionals read The Wall Street Journal and expect you to be fluent on current issues.

PROJECTS, HOMEWORK, AND PRESENTATIONS:

During the semester a series of assignments will be given. Grading on these assignments will cumulate to a total of 100 points. These will be handed out by your instructor during the semester.

TERM PAPER:

Early in the semester each student must select a current topic relative to financial institutions management that he/she wishes to follow during the semester. Ideas for this topic may be generated by news sources, conversations with industry participants, classroom discussion, etc. During the semester, the student should follow the topic and glean information regarding the topic from any source available. Complete a term paper on your topic. Research done on this paper must be for this class only. The paper should describe the general nature of your topic, its potential impact on the profits and/or competitive position of affected financial institutions, any risk management issues should be identified and explained, along with any regulatory implications. It will be necessary to do some background research on your selected topic. The paper must be a minimum of 10 pages in length and a maximum of 15 pages in length, excluding title page, bibliography, and any related attachments. The paper should be typewritten or word processed with 12 point type and double spaced. Page numbers should be centered at the bottom of each page beginning with the second page of written text. The paper must have a bibliography with at least eight (8) sources. Federal Reserve publications are good research sources for this class. Many of these publications can be downloaded from websites free of charge.

A one page term paper proposal is due on Wednesday February 20. Included with this proposal must be an identification of your topic and a preliminary bibliography with at least three sources. The class text is ineligible as a bibliographic source. This proposal must be approved by me. The final paper is due on Wednesday April 23.

COURSE GRADES:

Course grades will be based on 600 possible points as follows:

First exam (15% of course grade) - 100 points

Second exam (15% of course grade) - 100 points

Final exam (25% of course grade) - 100 points

Projects and presentations (15% of course grade)- 100 points

Term paper (15% of course grade)- 100 points

WSJ quizzes (15% of course grade) - 100 points

Total points possible 600 points

COURSE GRADING SCALE

Average course grades of

• 90% or greater A

• 80%-89% B

• 70%-79% C

• 60%-69% D

• 59% or below F

This grading scale may be lowered at my discretion when assigning final grades. I will comply with University policy in awarding a grade of incomplete (I). Please see Grading System in the graduate catalog. Due to the sensitive nature of grade information, course grades will be distributed through normal university channels with no exceptions.

CLASS DATES AND ASSIGNMENTS:

This is a proposed outline and it may be strayed from depending on the pace of the class.

Jan. 16 Introduction and syllabus

Jan. 23 Introduction to Financial Institutions Chapter 1

Jan. 30 Financial Intermediaries and Risk. Chapter 7.

Feb. 6 Capital Adequacy. Chapter 20.

Feb. 13 Class presentations on the various financial institutions. Chapters 2-6

Feb. 20 Capital Adequacy (Cont.). Chapter 20.

Term paper proposals are due.

Feb. 27 Liquidity Risk; Liability and Liquidity Management. Chapters 17 & 18.

Mar. 5 FIRST EXAM

Mar. 12 Interest Rate Risk Chapters 8, 9, 24 & 25

Mar. 19 SPRING BREAK

Mar. 26 Interest Rate Risk (Cont.) Chapters 8, 9, 24 & 25

Apr. 2 Market Risk Chapter 10

Apr. 9 SECOND EXAM

Apr. 16 Guest Speaker

Apr. 23 Credit Risk. Chapters 11, 12, & 27

Term papers are due

Apr. 30 Credit Risk (Cont.) Chapters 11, 12 & 27

May 7 FINAL EXAM

NOTE: Other than the scheduled exams, this schedule may be changed at my discretion. Regardless, no material will be covered on an exam prior to that material being covered in class.

COURSE POLICIES AND PROCEDURES:

Exam Policies

(CPP 1) We will have two midterm exams and one comprehensive final exam. During the exams, you may use a calculator. No programmable calculators may be used during exams. You may also use one 8½ X 11 reference sheet during each of the exams. Both sides of this reference sheet may be used with no attachments. No other information may be used on exams. All cell phones, pagers, two-way communication devices, etc. must be turned off during exams.

(CPP 2) Regular scheduled semester exams and WSJ quizzes will be returned in class. Grade appeals must be submitted to me within one week from the date that the exam or quiz is returned in class. If you have a grade appeal for a question on your exam or quiz, you must write your appeal as a memorandum detailing why you believe that your question should be graded again. Upon receiving a grade appeal, I will review and re-grade you entire exam or quiz within one week. I will correct arithmetic errors without regrading the entire exam or quiz, but I will still need a written message to explain the problem. The message may be written on the top of the page of the exam or quiz.

(CPP 3) You are welcome to discuss class issues with me at any time during my office hours or by e-mail with the following exception: After noon on the day before the exam and on the day of the exam. I will not answer questions about that exam’s material. When I hand back an exam in class, I will discuss individual exams individually in my office. See CPP 2 above for more information and keep in mind CPP 5 below.

(CPP 4) Notify me prior to missing an exam, or as soon as possible after missing an exam. It is impossible to give a make-up exam that is fair to both you and the rest of the students in the class so I will automatically assign the weight for that excused regular scheduled semester exam to the final exam score with CPP 5. Unexcused absences receive a grade of zero percent, but see CPP 5.

(CPP 5) Low regular scheduled semester exam policy. If your final exam score is higher than one of your two regular scheduled semester exam scores, I will substitute your final exam score for your lowest exam score. For the purpose of this policy, an excused absence counts as the lowest score for the two regular scheduled semester exams. An unexcused absence can not be substituted for and will count as a zero percent.

ADA Statement

(CPP 6) The College of Business Administration complies 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 would like to request accommodation, please see me s soon as possible before the end of the third week of classes. My office hours and office number are shown on this syllabus.

Attendance

(CPP 7) While my grading system does not include an attendance policy, I strongly urge students to attend class in accordance with the University policy which states regular and punctual class attendance is expected.

Professional Behavior Guidelines

(CPP 8)

Tardiness: Please try to arrive on time. If you are later than five minutes after the start of class, please enter quietly. Be aware that entering the room disturbs the concentration of the your classmates that are actively learning the material. Remember the University policy states regular and punctual class attendance is expected.

Side Conversations: Side conversations make it difficult for you classmates to actively listen and learn. Besides I am capable of creating enough confusion without assistance.

Sleeping: Get a good night’s rest before coming to class. Falling asleep during class is not considered professional behavior.

Cell phones should be placed on silent. Please restrict conversations to outside the classroom (this includes text messaging.)

While in class, focus and actively listen to the material being presented in class. Do not be involved with other material unrelated to this class and the current lecture.

Laptop computers may be used in my class only for the purpose of taking lecture notes (this excludes the use of wi-fi during the class.)

Miscellaneous Policies

(CPP 9) I do not give additional projects to increase one’s grade before or after the final exam. Grades in this class are determine with the guidelines and policies expressed in this syllabus.

(CPP 10) You may audio-tape my lecture only for your exclusive use in this course. My lectures and lecture notes are part of my intellectual property and should be respected as such.

(CPP 11) : UNT Academic Dishonesty Statement

The UNT Code of Student Conduct and Discipline provides penalties for misconduct by students, including academic dishonesty.

Academic dishonesty includes cheating and plagiarism.

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 the instructor 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.

The term "plagiarism" includes, but is not limited to, the use, by paraphrase or direct quotation, of the published or unpublished work of another person without full and fair acknowledgment. It also includes the unacknowledged use of materials prepared by another person or agency engaged in the selling of term papers or other academic materials. (Source: Code of Conduct and Discipline at the University of North Texas.)

Penalties: if you engage in academic dishonesty related to this class, you will receive a failing grade on the test or assignment, and a failing grade in the course. In addition, the case will be referred to the Dean of Students for appropriate disciplinary action.

A Statement Concerning Plagiarism**

Not only a writer's facts and ideas, but also his diction and syntax should be regarded as his property. Any person who uses a writer's content or phraseology without giving due credit is guilty of plagiarism. A student gives credit for a writer's ideas by footnoting properly; he gives credit for a writer's phraseology by enclosing all quoted material within quotation marks.

Plagiarism is sometimes a result of outright dishonesty--when, for example, a student copies another student's paper and turns it in as his own work; or when he puts in his paper ideas or phrases from a published source without giving any indication that he has done so. Such practices will result in failure on the paper and perhaps failure in the course. But plagiarism usually occurs in a student's paper as a result of careless note-taking on his part as he reads his sources. (See 33e in the Harbrace College Handbook.) The student who reads a body of source material without taking careful notes will write his paper as bits of ideas or phraseology from his sources float into consciousness--and the paper will almost certainly contain plagiarism of one kind or another.

Ideas that are not the student's own may be put in a paper without a footnote (or some kind of documentation) only if they are common knowledge. Common knowledge is defined as information that:

1. is found in several sources,

2. is written entirely in the words of the student, and

3. is not paraphrased from any single source.

Whenever any idea is taken from a specific source, even when the student states the idea entirely in his own words, there must be a footnote giving credit to the author responsible for the idea. (Of course methods of documentation vary, and it sometimes is possible to cite in the text of the paper itself rather than in a footnote. The point is that the student should give due credit to other writers for their ideas.)

Students seldom fail to give their sources proper credit for ideas or content, much more frequent is the plagiarism that occurs when a student fails to enclose quoted material within quotation marks. In order to avoid this kind of plagiarism, the student must follow the principle of paraphrasing a source: He should never retain a sentence pattern and substitute synonyms for the original words; he should never retain the original words and alter the sentence pattern. To paraphrase means to alter both the sentence pattern and the words of a source passage. The student may choose to mix words or phrases from the source in with his paraphrase, but only if he is certain to place those words and phrases within quotation marks. Even when a student uses only one key word from a source, he must place that word within quotation marks.

If an entire paragraph of the student's paper is material paraphrased from one source, a footnote at the end of that paragraph is insufficient documentation, for that footnote in itself does not tell the reader how much of the paragraph is taken from the source--whether all of it, or only the last sentence or two. The student should indicate where in his paragraph the paraphrase begins by the use of such phrases as "One critic insists ...,” "The New York Times reported . . .,” “Another view is that . . ,” or by other more subtle, stylistic devices.

The quotation of an entire source paragraph as a paragraph in the student's paper is an unsatisfactory way of avoiding plagiarism even if the student has footnoted the passage properly and enclosed it entirely within quotation marks. Such a practice indicates that the organization and the content of the paper are not truly the student's own. Another indication that the sources rather than the student have furnished the structure of a paper is the excessive use of quoted or paraphrased material. Generally, quoted material should be used to illustrate or substantiate the student's ideas, not to make the main points in the paper.

After the student completes his paper in its final form, he is expected to check all quotations and paraphrased material for accuracy by comparing them to the original passages in his sources.

** This "Statement Concerning Plagiarism" was written by Professors James Linebarger and Robert Stevens at the request of the Freshman Subcommittee of the UNT English Department. The English Department has given its permission to use this information in this course. I added the italics to the above passage.