UNIVERSITY OF MANITOBA I.H. ASPER SCHOOL OF BUSINESS

UNIVERSITY OF MANITOBA
I.H. ASPER SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
FIN 3460 – FINANCIAL MARKETS AND INSTITUTIONS
Winter (Term 2) 2016:
Professor:
Office:
E-mail:
Office Hours:
A01, Mondays & Wednsdays, 2:30 pm -3:45 pm, 138 Drake
A02, Mondays & Wednsdays, 11:30 am -12:45 pm, 108 Drake
Steven X. Zheng
410 Drake Centre
[email protected]
Mondays and Wednesdays, 4 –5 p.m. and by appointments
PREREQUISITES:
Required Prerequisite: FIN 2200 or 9.220 with a grade of C+ or above, MATH 1300 or MATH 1310 with
a grade of C or above, and STAT 2000 with a grade of C or above.
COURSE OBJECTIVE:
This course provides students with an overall understanding about financial markets and institutions.
REQUIRED MATERIALS:
1. Mishkin and Eakins, Financial Markets & Institutions, 8th Edition, Prentice Hall, 2015
2. Hewlett Packard HP-10BII financial calculator or other higher level financial calculators
RECOMMENDED READING:
It is suggested that you read about current business activities. This will enable you to see the course
material applied in real business situations. Two suggested sources of current business information are
(1) The National Post (Financial Post), and (2) The Globe and Mail (Report on Business). Both of these
publications are usually available outside the front door of the Drake Centre each morning. In addition,
copies are available in the library.
UM Learn:
All supplemental material to the course will be available on UM Learn. Students are responsible for
checking UM Learn and downloading the relevant material before each class.
Follow the instructions below to log in to UM Learn:
1. On the University of Manitoba homepage (www.umanitoba.ca), click on “UM Learn”.
2. Login to UM Learn using your UMnetID as the Username.
3. Once logged in to your UM Learn page, click the “Financial Markets and Institutions” course title.
GRADING AND EXAMINATIONS:
Final grades are based on the student’s weighted mark and performance relative to other students.
Participation
Presentation
Midterm Exam
Final Exam
Monday, February 29, 2016, 7:30 pm – 9 pm, Room 343 Drake
TBA
10%
10%
30%
50%
Participation: To earn the marks for participation, show your name plate on the table in every class and
try to answer the questions asked by the professor.
Presentation: The presentation is group work. Students in this course should form groups of 1- 4
members. Members of each group should work together on the presentation. The professor will distribute
a list of presentation topics and each group should pick one topic from the list. Each group’s topic has to
be approved by the professor and the approval is on a ‘first come, first served’ basis. The professor will
schedule the date of each presentation. Depending on the progress of this course, a presentation may be
rescheduled to a later date (but not earlier). The presentation should last about 20 minutes. The grade for
the presentation will be based on evaluation by the audience (the rest of the class).
Presentation Report: Before the presentation starts, the presenting group must email the professor a
report with the names of the group members and the content of the presentation.
Peer Evaluation: A student’s grade for the presentation will be based on his/her group’s grade and peer
evaluation. After a group finishes the presentation, each group member should email the professor his/her
evaluation of other group members’ performance. The evaluation should be on a scale of 1 to 5. Five is
for the best performance and 1 is for the lowest. If no evaluation is received from a certain student before
the final exam, the professor will assume that the student gives evaluations of 5 to all his/her group
members. Any student who harasses other group members about peer evaluation will lose the right to do
peer evaluation and be subject to further penalty.
The fine print:
Students are not allowed to miss the midterm exam unless a valid medical excuse is provided. Any student with valid medical
excuses must submit a doctor’s note testifying that the student is not fit to take the exam. There will be no make-up exams.
Those students who miss the midterm and have a valid medical excuse will have the weight of the midterm added to the final
exam. Those students who miss the midterm without a valid medical excuse will receive a mark of 0% on the midterm. Groups
should do the presentation on the date scheduled by the professor. If a group misses its presentation, all group members will
lose the grade for the presentation.
TENTATIVE COURSE SCHEDULE:
You will find that the course progresses quickly and the material covered builds on earlier
material. It is important to stay current in your studies. If you read the text in advance of the
relevant classes, you will have a much better chance of understanding the material as it is taught.
It is the student’s responsibility to read the assigned material prior to the relevant class.
Date
Jan. 6-11
Jan. 13-18
Jan. 20
Jan. 25-27
Feb. 1
Feb. 3-8
Feb. 10
Feb. 15-19
Feb. 22-24
Feb. 29
Mar. 2
Mar. 7
Mar. 9
Mar. 14
Mar. 16
Mar. 21
Mar. 23
Mar. 28
Mar. 30-Apr. 4
Apr. 6
Topic
Overview of the Financial Markets and Institutions
The Fundamentals of Interest Rates
Central Banks and the Bank of Canada
Monetary Policy
The Money Markets
The Capital Markets
The Mortgage Markets
Midterm Break
The Foreign Exchange Market
Midterm, 7:30 pm – 9 pm, Room 343 Drake
Overview of Banks
The Near Banks
Banking Regulation
Mutual Funds
Insurance Companies and Pension Funds
Investment Banks, Security Brokers and Dealers
Venture Capital Firms and Finance Companies
Financial Crises
Risk Management in Financial Institutions
Hedging with Financial Derivatives
Chapter
1, 2, 7
3-5
9
10
11
12-13
14
TBA
Final Exam
1-27
15-16
17, 19
26
18
20
21
22
22, 27
8, 25
23
24
Note: all exams are to be done on an individual basis. It is an academic offense to use the
material or answers of another student or to provide another student with your material or
answers. Any suspected breach of the Faculty’s code of Academic Integrity will be
reported to and dealt with by the Dean’s office.
FIN 3460 Financial Markets and Institutions
Professor Steven X. Zheng
Presentation Topics and Tentative Schedule:
Jan. 20: Overview of the Federal Reserve System: Origin, Structure, Functions, and
Independence
Feb. 1: Money Market Instruments 1: Treasury Bills, Federal Funds, and Repos
Feb. 1: Money Market Instruments 2: CDs, Commercial Paper, and Eurodollar
Feb. 3: Bonds: Treasury Notes and Bonds, Municipal Bonds, and Corporate Bonds
Feb. 3: Canadian Stock Markets: History, Current Situation and Future (Not in the
Textbook)
Feb. 8: Stock Market Indices: Describe and compare major stock market indices (Down
Jones Industrial, NASDAQ, S&P500, S&P/TSX …)
Feb. 10: Mortgage Backed Securities: Motivation, Definition, Characteristics of different
types of Mortgage Backed Securities
Mar. 7: Commercial Banking Industry in Canada and the US: current situation, major
differences between the two countries, possible explanations (Only partially in the
Textbook)
Mar. 7: Credit Unions and Caisses Populaires in Canada (Not in the Textbook)
Mar. 7: Credit Unions in the US
Mar. 9: Savings and Loan Industry in the US
Mar. 14: Mutual Funds
Mar. 14: Hedge Funds
Mar. 16: Life Insurance Companies: products, assets and liabilities…
Mar. 16: P&C Insurance Companies: products, assets and liabilities…
Mar. 16: Pension Plans: Definition, Types, Regulation, Future
Mar. 23: Venture Capital Firms: Role, Organization, Operation
Mar. 23: Finance Companies: Purpose, Types, Businesses, Assets and Liabilities,
Historical Trend and Future
Other topics you are interested in (must be approved by the professor before you start
preparing).
FIN 3460 Financial Markets and Institutions
Professor Steven X. Zheng
Grading of Presentations
The grading of presentations will be done by the audience. To be considered as having
good quality, a presentation should have
1. Good organization. The presentation should have a clear structure easily
understood by the audience.
2. Good content. The presentation should cover the important points about a certain
topic. The important points should include, but not limited to, the major points in
the textbook. The presenting group can add any other points they consider as
important. In addition, the presentation should be up to date.
3. Clear explanation. The presenting group should explain the material clearly to the
audience. The audience is encouraged to ask questions. The professor may also
ask questions. The presenters should be ready to answer the questions and the
answer will be considered in grading.
4. Interesting stuff, if possible. But the presenting group has to make sure that the
stuff is relevant to your presentation topic and is of academic nature. Don’t bring
anything that may be offensive to anyone.
Each member of the audience should consider all the factors above and give an
evaluation about the presentation on the scale of 1 to 5 with 5 for the best performance
and 1 for the worst performance.
Tips for getting good presentation evaluation: don’t just read from notes. Try to explain
everything in your own words. Have a lot of eye contact with the audience.
Academic Integrity
It is critical to the reputation of the I. H. Asper School of Business and of our degrees,
that everyone associated with our faculty behaves with the highest academic integrity.
As the faculty that helps create business and government leaders, we have a special
obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in
our academic transactions violates this trust. The University of Manitoba Undergraduate
Calendar addresses the issue of academic dishonesty under the heading “Plagiarism and
Cheating.” Specifically, acts of academic dishonesty include, but are not limited to:
• using the exact words of a published or unpublished author without quotation
marks and without referencing the source of these words
• duplicating a table, graph or diagram, in whole or in part, without referencing the
source
• paraphrasing the conceptual framework, research design, interpretation, or any
other ideas of another person, whether written or verbal (e.g., personal
communications, ideas from a verbal presentation) without referencing the source
• copying the answers of another student in any test, examination, or take-home
assignment
• providing answers to another student in any test, examination, or take-home
assignment
• taking any unauthorized materials into an examination or term test (crib notes)
• impersonating another student or allowing another person to impersonate oneself
for the purpose of submitting academic work or writing any test or examination
• stealing or mutilating library materials
• accessing tests prior to the time and date of the sitting
• changing name or answer(s) on a test after that test has been graded and returned
• submitting the same paper or portions thereof for more than one assignment,
without discussions with the instructors involved.
Group Projects and Group Work Many courses in the I. H. Asper School of Business require group projects. Students
should be aware that group projects are subject to the same rules regarding academic
dishonesty. Because of the unique nature of group projects, all group members should
exercise special care to insure that the group project does not violate the policy on
Academic Integrity. Should a violation occur, group members are jointly accountable
unless the violation can be attributed to a specific individual(s).
Some courses, while not requiring group projects, encourage students to work together in
groups (or at least do not prohibit it) before submitting individual assignments. Students
are encouraged to discuss this issue as it relates to academic integrity with their instructor
to avoid violating this policy.
In the I. H. Asper School of Business, all suspected cases of academic dishonesty are
passed to the Dean’s office in order to ensure consistency of treatment.
AACSB Assurance of Learning Goals and Objectives.
The Asper School of Business is proudly accredited by AACSB. Accreditation
requires a process of continuous improvement of the School and our students. Part of
“student improvement” is ensuring that students graduate with the knowledge and
skills they need to succeed in their careers. To do so, the Asper School has set the
learning goals and objectives listed below for the Undergraduate Program. The
checked goal(s) and objective(s) will be addressed in this course and done so by means
of the items listed next to the checkmark.
Goals and Objective in the Undergraduate Program
1
B.
C.
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Use correct English grammar and mechanics in their written work.
Communicate in a coherent and logical manner
Present ideas in a clear and organized fashion.
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Presentations
Presentations
Presentations
Ethical Thinking
A.
B.
C.
D.
4
Determine which quantitative analysis technique is appropriate for
solving a specific problem.
Use the appropriate quantitative method in a technically correct
way to solve a business problem.
Analyze quantitative output and arrive at a conclusion.
Written Communication
A.
B.
C.
3
Course Item(s)
Relevant to
these Goals
and Objectives
Quantitative Reasoning
A.
2
Goals and
Objectives
Addressed
in this
Course
Identify ethical issues in a problem or case situation
Identify the stakeholders in the situation.
Analyze the consequences of alternatives from an ethical
standpoint.
Discuss the ethical implications of the decision.
Core Business Knowledge
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Entire course