E&M 368 Financial Markets

Syllabus

Prof. Jon A. Hooks
Spring 2009
Rob. 104 x0530 Office Hours
MWF 11-12, Olin 112
E-mail: jhooks@albion.edu

TEXTS

(1) Financial Markets and Institutions, Abridged 8th ed. Jeff Madura (ISBN-10: 0324593643, ISBN-13: 978-0-324-59364-8)

(2) A Random Walk Down Wall Street, 9th ed., Burton Malkiel.

Regular reading of the Wall Street Journal is required. As they arise, contemporary issues will be incorporated into the discussion and exams.

Journal articles and other readings will frequently be put on reserve in the library. These readings will be announced in class.

COURSE DESCRIPTION

This class is an introduction to the many facets of U.S. financial markets. The focus is on how resources are efficiently transferred from those with a surplus to those with a deficit, and on the instruments which facilitate this transfer. The discussion will be divided into four major sections: (1) Financial Markets, Flow of Funds, and Financial Intermediaries; (2) Bond Markets and Interest Rate Determination; (3) Equity Markets and Market Efficiency; and (4) Derivatives.

Each section will consist of institutional information as well as important theoretical considerations. In addition, each section will consider the role of both the individual and institutional participant.

A major goal of this class is to develop the ability to analyze financial market issues in a structured, cost-benefit framework. Thus, while having institutional knowledge about markets, institutions, and instruments is necessary, so is the ability to solve analytical problems that arise in this context. To this end, our approach will focus on three goals: (1) building an institutional framework; (2) developing an understanding of major theories; and, (3) developing problem solving skills.

A final goal is to ensure that you are technologically literate. Thus, we will learn to retrieve data from the internet, and explore the ways in which technology has impacted the operations of the financial markets.

COURSE REQUIREMENTS

Attendance and participation in class discussions is expected of each student. If overall attendance is bad, official attendance will be taken. There will be 2-4 quizzes (25 points each), four noncumulative exams (including the "final" exam), and at least one project (an options project) and perhaps 2-3 (I will discuss this in class). Project 1 is worth 50 points. The remaining projects will likely be worth 25-50 points (each). There will also be homework assignments from the textbook. Some of these textbook assignments will be collected and graded (usually 10 pts each)....I will discuss this further in class.

Grades are assigned based on the final distribution of total points according to the following scale (grading will be discussed further in class):

93-100..... 4.0
89-92....... 3.7
85-88....... 3.3
80-84....... 3.0
75-79....... 2.7
70-74....... 2.3
65-69....... 2.0
60-64....... 1.7
55-59....... 1.3
50-54....... 1.0
< 50......... 0.0

Feel free to check with me periodically to discuss your performance to date, or to discuss any questions you have.

************ These requirements may be amended with notice *************

Click HERE for the EM368 Course Outline

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