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Management of Financial Institutions

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Management of Financial Institutions

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)

  1. 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.
  2. 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.
  3. The reading materials for each class will be given prior to that class so that student may have a cursory look into the materials.
  4. Class participation is vital for better understanding of sociological issues. Students are invited to raise questions.
  5. Students should take tutorials with the instructor during the office hours. Prior appointment is required.
  6. Students must maintain the IUB code of conduct and ethical guidelines offered by the School of Business.
  7. 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.
  1. 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.