This course studies the structure and operation of various types of entities that are stakeholders in the global financial services industry. Emphasis is particularly placed on managing return and risk in the modern financial institutions. The risk management approach is explained through their contribution in bearing risk on behalf of their customers. The influence of term structure of interest rates and the regulation of financial markets on performance of these institutions is also examined. Different financial markets and the impact of its key players are also thoroughly investigated.
FIN301 (Business Finance I)
- It is the student’s responsibility to gather information about the assignments and covered topics during the lectures missed. Regular class attendance is mandatory. Points will be taken off for missing classes. Without 70% of attendance, sitting for final exam is NOT allowed. According to IUB system students must enter the classroom within the first 20 minutes to get the attendance submitted.
- The date and syllabus of quiz, midterm and final exam is already given here, however, announcements will be given ahead of time. There is NO provision for make-up quizzes.
- The reading materials for each class will be given prior to that class so that student may have a cursory look into the materials.
- Class participation is vital for better understanding of sociological issues. Students are invited to raise questions.
- Students should take tutorials with the instructor during the office hours. Prior appointment is required.
- Students must maintain the IUB code of conduct and ethical guidelines offered by the School of Business.
- Students must refrain from any type of cheating and/or plagiarism in a course. Any student acting otherwise will receive an “F” grade in the course. School of Business, IUB, maintains a zero tolerance policy regarding violation of academic integrity.
- Students are not allowed to keep bags, handouts, books, mobile phones, smart watches or any other smart electronic devices with them during any exam. Students are advised to keep everything in the front of the class room before the exam starts. Please note that, just carrying any smart electronic devises (even if the devise is turned off or put it in silent mode) during the exam will be considered as “cheating”. Moreover, during the exam, anything written on hand palms (or anywhere else) and carrying paper materials (whatever is written) will be considered as “cheating”. Any sorts of “cheating” will result in an “F” grade with no exception. During the exam, students are only allowed to carry pen, pencil, eraser, sharpener, ruler, highlighter and calculator in a clear plastic bag.
| Type of Evaluation | Nos. | Weight |
| Class Attendance and Participation | 100% | 5 |
| Quiz (Best two will be counted) | 4 | 15 |
| Project and Presentation | 02 | 30 |
| Midterm Exam | 01 | 20 |
| Final Exam | 01 | 30 |
| Total | 100% |
The following chart will be followed for grading. This has customized form the guideline provided by the school of Business.
| A | A- | B+ | B | B- | C+ | C | C- | D+ | D | F |
| 90-100 | 85-89 | 80-84 | 75-79 | 70-74 | 65-69 | 60-64 | 55-59 | 50-54 | 45-49 | 0-44 |
* Numbers are inclusive
The course will be based mostly on the following books [some other books and journals may be referred time to time]:
- Madura, J; 2011, Financial Markets and Institutions,; 10th Edition; South Western College Pub
Link to virtual learning system: http://103.254.86.4/sb/ (School of Business – Faculty name- Login as a guest- password is 1234).
| Sessions | Topic | Learning Outcomes | Readings |
| Session -1 | Introduction | Understand the functions and structure of financial markets
|
Madura, Chapter 1 and Course Outline
Handout available on virtual learning system |
| Session -2 | Role of Financial Markets and Institutions | Explore the different types of financial markets and institutions
Identify the different securities traded in the markets Understand the characteristics of different securities Understand the role of global financial markets
|
Madura, Chapter 1
Handout available on virtual learning system |
| Session -3 | Determination of Interest Rates | Understand the Loanable funds theory and the different suppliers and demanders of loanable funds
|
Madura, Chapter 2
Handout available on virtual learning system |
| Session -4 | Determination of Interest Rates
|
Explore the loanable funds theory in details
Understand how the different economic forces affect interest rates Identify the role of loanable funds theory in forecasting interest rates
Relevant Problem Solving from Text |
Madura, Chapter 2
Handout available on virtual learning system |
| Session -5 | Structure of Interest Rates
|
Understand the characteristics of debt securities and reasons why their yields vary
Understand the basics of yield curves
Relevant Problem Solving from Text
|
Madura, Chapter 3
Handout available on virtual learning system |
| Session -6 | Structure of Interest Rates
Quiz – 1 |
Discuss the basics of term term structure
Explain the changes in term structure through Pure expectations theory
Relevant Problem Solving from Text
Knowledge on Role of financial markets and institutions and Determination of interest rates |
Madura, Chapter 3
Handout available on virtual learning system |
| Session-7 | Structure of Interest Rates
|
Explain the changes in term structure through Liquidity premium and segmented markets theory
Discuss the international structure of interest rates
Relevant Problem Solving from Text |
Madura, Chapter 3
Handout available on virtual learning system |
| Session -8 | Functions of the Central Bank
Project Distribution |
Identify the functions of Bangladesh Bank
Identify the different monetary policy tools Discuss the impact of open market operations in controlling monetary policy
Relevant Problem Solving from Text |
Madura, Chapter 4
Handout available on virtual learning system |
| Session -9 | Functions of the Central Bank
|
Discuss the impact of Discount rate and Required reserve ratio in controlling monetary policy
Discuss the different technical factors hindering the control of monetary policy Explain which money supply is controlled by the central bank
Relevant Problem Solving from Text
|
Madura, Chapter 4
Handout available on virtual learning system |
| Session -10 | Monetary Theory and Policy
|
Understand the Keynesian point of view of monetary theory
Understand how to correct different economic conditions through monetary theory Discuss the different economic indicators monitored by the central bank
Relevant Problem Solving from Text |
Madura, Chapter 5
Handout available on virtual learning system |
| Session -11 | Monetary Theory and Policy
Quiz – 2 |
Understand how the central bank uses the economic indicators in determining required monetary policy
Explore the different lags hindering monetary policy applications Understand the tradeoffs faced by the central bank
Relevant Problem Solving from Text Knowledge on Structure of interest rates and Functions of the Central Bank |
Madura, Chapter 5
Handout available on virtual learning system |
| Session -12 | Monetary Theory and Policy
|
Understand the global effects of monetary policy
Case study on how central bank identifies economic conditions and how they correct such situations
Relevant Problem Solving from Text
|
Madura, Chapter 5
Handout available on virtual learning system |
| Session -13 | Review for Midterm | Chapters 1, 2, 3, 4, 5
|
Madura Chapter 1,2,3,4,5 |
| Session -14 | Midterm Exam | Chapters 1, 2, 3, 4, 5 | Madura Chapter 1,2,3,4,5 |
| Session -15 | Money Markets | Understand the functions of money markets
Understand the basics of money market securities Identify and calculate the yields of different money market securities
Relevant Problem Solving from Text |
Madura, Chapter 6
Handout available on virtual learning system |
| Session -16 | Money Markets | Identify and calculate the yields of different money market securities
Explain the Institutional use of money markets Understand the globalization effects on money markets
Relevant Problem Solving from Text |
Madura, Chapter 6
Handout available on virtual learning system |
| Session -17 | Debt Security Markets | Understand the functions of bond markets
Identify different types of bond securities Explain the characteristics of treasury bonds
Relevant Problem Solving from Text |
Madura, Chapter 7
Handout available on virtual learning system |
| Session -18 | Debt Security Markets
Quiz -3 |
Understand the characteristics of corporate bonds
Understand the basics of mortgage markets Explain the rationale behind investing in junk bonds
Relevant Problem Solving from Text
Knowledge on Money Markets |
Madura, Chapter 7 and 9
Handout available on virtual learning system |
| Session -19 | Stock Offerings and Investor Monitoring
|
Understand the basics of common and preferred stocks
Explain the characteristics of stock markets
Relevant Problem Solving from Text
|
Madura, Chapter 10
Handout available on virtual learning system |
| Session -20 | Stock Offerings and Investor Monitoring
|
Understand the basics and functions of stock indexes
Explain the different techniques followed by firms to monitor their own stocks in the market
Relevant Problem Solving from Text
|
Madura, Chapter 10
Handout available on virtual learning system |
| Session -21 | Mutual Fund Operations
Project Distribution |
Explain the background of mutual funds
Understand the different types of mutual fund Explain the different categories of mutual funds
Relevant Problem Solving from Text |
Madura, Chapter 23
Handout available on virtual learning system |
| Session -22 | Mutual Fund Operations
Quiz 4 |
Understand the different costs and calculating the NAV of mutual funds
Explain the factors affecting the mutual fund performance
Knowledge on Debt Markets and Stock Offerings and Investor Monitoring |
Madura, Chapter 23
Handout available on virtual learning system |
| Session -23 | Insurance and Pension Fund Operations | Understand the background of insurance and pension funds
Explain the different dilemma faced while setting insurance premiums Identify the different risks faced by insurance companies Explain the different types of pension funds |
Madura, Chapter 25
Handout available on virtual learning system |
| Session -24 | Project Presentation | Analysis on the Impact of the Global Financial Crisis and Oil Price Crisis on the Financial Sector of Bangladesh | |
| Session-25 | Project Presentation | Analysis on the Impact of the Global Financial Crisis and Oil Price Crisis on the Financial Sector of Bangladesh | |
| Session -26 | Final Exam | CHAPTERS 6, 7, 9, 10, 23 and 25 | Madura, Chapter 6, 7, 9, 10, 23 and 25 |
Students who are willing to audit the course are welcome during the first two classes and are advised to contact the instructor after that.
Plagiarism- that is the presentation of another person’s thoughts or words as though they were the students’ own – must be strictly avoided. Cheating and plagiarism on exam and assignment are unacceptable.
Please see the green book for further information about academic regulation and policies, including withdrawal and grading, apples and penalties for pilgrims and academic misconduct.
Students with disabilities are required to inform the School of Business/ Department of Economics of any specific requirement for classes or examination as soon as possible.