FIN 3103 (C) - Financial Markets
Semester I. 2008/2009 (Aug. 2008 – November 2008)
Instructor Dr. Zsuzsa R. Huszár
Class hours Section C1: 12:00PM – 2:50, Tuesday in BIZ CRC1 (BIZ 2 04-13B)
Office contact BIZ1 #04 -13, Office Phone: 6516 - 8017
E-mail email@example.com (preferred contact)
Office hours Tuesday & Thursday 3 PM – 5 PM and Wednesday 10 AM – 12 PM
(or by appointment)
Description FIN3103 is an introductory financial markets course. The course aims to familiarize students with the local (Singaporean and ASEAN) and global (US & European) financial markets. The course prerequisite is FIN 2004.
Objectives The objectives of the course are to gain an understanding of:
§ the local financial market and institutions in Singapore;
§ the functioning of two main international financial markets, the US and the European markets;
§ the different financial services offered by the different types of financial institutions;
§ the different financial assets traded on the local and global financial markets (e.g., equities, bonds, treasuries and currencies). Value the different financial assets, and understand how specific global and local factors influence the values of these assets.
Textbook/Readings Recommended textbook: Frank J. Fabozzi and Franco Modigliani (2003), “Capital Markets: Institutions and Instruments” 3rd Ed. Pearson Education
Reference textbook: Anthony Saunders and Marcia Millon Cornett (2007), “Financial Markets and Institutions: An Introduction to the Risk Management Approach” 3rd Ed. McGraw Hill.
Other reading: Visiting the course website (on IVLE) prior to each lecture is crucial to succeed in the course. Students should download PowerPoint presentations (PPPs) in advance to prepare for class and it is highly recommended that students use PPPs as templates for note taking in class. Please note that not all information from class is posted on IVLE.
Students should read business newspapers to stay current, such as Financial Times, Business Times, The Straits Times, Asia Wall Street Journal, and/or US Wall Street Journal (via Factiva). Also, watch Channel News Asia at http://www.channelnewsasia.com/;
Calculator Only NUS approved financial calculators are allowed in the course. If you do not already have one, I highly recommend the TI BA II Plus. It is inexpensive and is considered very easy to use. It is also what I use so I am familiar and able to help with the functionalities.
Course Policy As classroom participation is part of the students’ grade, it is in the student’s best interest to attend classes (on time), listen to the instructor and actively engage in class discussions. Students will benefit most from this class if they read the assigned materials and relevant articles in current newspapers as preparation for each class. Students will be randomly called upon to discuss concepts and express their own opinion on certain class subjects. Students are also encouraged to participate in class by raising questions. According general class policy, students are expected to be punctual, required to pay respect and not disturb the class. Cell phones, beepers, palm computers must be switched off all times. Students missing more than two classes (excluding medical reasons (medical certificates are required) or compassionate reasons) will be penalized and/or fail the entire module.
Exams There will be two exams (midterm and final quiz) during regular class time. As in this course the material is building on itself, the second exam may be partially cumulative exam. The midterm test is a 2-hour closed-book test covering topics before the term break. It is the students’ responsibility to make sure that they are available at the time of the midterm exam. The final quiz is a 1-hour closed-book quiz covering mostly topics after the midterm test, including topics from the group presentations. The quiz will be held during class hours in week 13 (last week of lessons). Students are to make sure that they are available to sit for the quiz.
Term Projects The class will be divided into 10 groups (4-5 students per group), where each group has to complete a mini teaching assignment. These teaching assignments aim to provide students with the opportunity to research specific financial market issues in depth and share the knowledge (including their viewpoints) with others in the class. The 10 topics for the 10 groups are listed on the instructor’s door (BIZ 1 #4-13) during the first week of class. On the first come first serve basis, students should put their name with their preferred topic (no more than 4 names for each topic) on the sign up sheet. Students who do not put their name on the list or their name is not within the first four names will be assigned to groups according to the discretion of the instructor. The research/teaching presentation dates are incorporated with the class material throughout the semester. The group members will be graded based on their presentation, written report, and the evaluation of other students from their group.
Only term projects that are submitted on time are accepted for full credit!
Each group must submit their project (both write-up and presentation) electronically (via email) and a hard copy (professionally written maximum 6 page document plus appendices if required) by 8AM on the Monday prior to the their assigned presentation date (e.g., Group 1 must present on 16th Sept., thus their project must be turned in by 8AM on 15th Sept.). Each group member should also submit a one page evaluation of his/her group partners’ work. These student critics used in grading as they aim to help the instructor to evaluate whether the work was evenly carried out in the group or whether one or more students were free-riders in the group. All projects will be made available on IVLE.
E-mail All important announcements will be posted on IVLE. It is the students’ responsibility to ensure that they receive all communications. Students must use their NUS email in communication with the instructor.
Feedback Students are encouraged to always feedback to the instructor comments and suggestions that may help the class to learn better.
Grading Class Participation 10%
Term Project (presentations/critics) 30%
Final quiz 20%
Grades will be not be emailed. Students can get information about grades in person in my office during office hours or by appointment. It is the student’s responsibility to review his/her exam in time by attending classes after exams (the midterms will be returned in class a week after the exam). The request a review of grade has to be made in timely fashion. If a student wants his/her grade reviewed he/she can request that in person (in the instructor office). But, students should be aware of the fact that the grade review is a comprehensive and objective process and it may (or may not) result a worse grade, not necessarily a better one.
Tentative Class Schedule (subject to change)
1 1-5 Introduction to Financial Markets – Financial Institutions
2 1-5 Financial Institutions – Banks versus Nonbanks
3 1-5 The role of financial institutions – Central Banks
4 Basel I and II
Presentations Group 1: The role of MAS – past, present and future
Group 2: Recent development in Islamic Banking in Asia
5-6 17-28 Interest Rates and Debt Market
Presentations Group 3 – Singapore Gov. Securities auction market
Group 4 – Singapore Corporate bond market
BREAK (Sept 20 – Sept 28)
7-8 7, 13-16 Equity market
Presentations Group 5 – Comparison of major exchanges
Group 6 – Globalization and Consolidation of exchanges
9-10 30 Forex market
Group 7 - Singapore forex regime
Group 8 – Currency crisis
11-12 10-12, 15-16 Derivatives market
Group 9 – Singapore derivates market (up till 2006)
Group 10 – What is new in the derivatives market? 13