Course:

Instructor: Semester:

Financial Markets and Institutions, FIN 3350. 001 25274

Peter Lewin

Spring 2013: January 14 –May 12, 2013

Tues & Thurs: 10:00am-11:15am/JSOM 1.117

 

| Course Information | Student Assessment | Course Outline | Reading Outline | Course Policies | Technical Requirements | Course Access | Course Communications | Student Resources | Scholastic Dishonesty | Course Evaluation | UTD Policies |

 

Course Information FIN 3350.

Financial behavior in relation to production and consumption decisions. Banking, financial intermediation, flows of funds, regulation and structure of financial markets. Selected topics of current interest.

Course Introduction

We live in an age of unprecedented prosperity and unprecedented change.   Financial markets are an integral part of this.  In this course we will learn that financial markets are crucial for the development of any economy.  We will learn what they are and how they function.  We will learn about different types of financial institutions, instruments and policy approaches.  And we will learn how money fits in. 

Course Learning Objectives - Learning Outcomes

1.   Students will be able to explain the functions and benefits of money.

2.   Students will be able to discuss the history of money. 

3.   Students will be able to explain the role and the benefits of financial intermediaries. 

4.   Students will be able to discuss the nature, determination and role of interest rates.

5.   Students will be able to calculate Present Value and understand and discuss how these concepts can also be related to explain the term structure of interest rates.

6.   Students will be able to list the types of financial assets available and discuss briefly the principles which guide their selection as part of a portfolio of assets.

7.   Students will understand and be able to explain the relationship between types of financial contracts and the characteristics of the business environment, including business size and cultural background.

8.   Students will be able to explain how regulation, inflation, and technology influence the development of financial institutions.

9.   Students will be able to explain the differences between futures, options and swaps.

10. Students will explain the functioning and history of foreign exchange markets, the significance of the balance of payments and the integration of currency areas.

11. Students will be able to explain the history and structure of the Fed and compare it to other central banks. Students will be able to discuss the tools of monetary policy.

12. Students will be able to explain and evaluate monetary policy. Students will be able to discuss, compare and contrast the Classical economists, Keynesian economics, Monetarism and other approaches.

Course Format

The course is divided into 12 “lessons” – see below. Each lesson following a series of PowerPoint slides. These will be made available to you.

For online students: The online material consists of 12 lessons. See Course Outline for details. Some of the lessons are longer than others. Please consult the accompanying instructions to determine how to listen to the online lessons and which method is best for you. 

Each audio lesson is accompanied by lecture materials (usually in PowerPoint format). These materials contain lesson objectives, information on recommended reading and provide required formulas, diagrams, tables and outlines.

Instructor Information

Brief biography:

I was born and grew up in Johannesburg, South Africa. I received a BA (honors) degree in Economics and History from the University of the Witwatersrand in Johannesburg in 1969. In September 1972, after teaching at the business school at that University, I left to study at the University of Chicago. I received a Ph.D. in Economics from the University of Chicago in 1979. I was fortunate to have as teachers at least four Nobel prize winners. In January 1979 I moved with my family to Dallas, where we have lived ever since. After seven years as an academic, I tried my hand in an entrepreneurial venture and joined a friend in a startup business called Soft Warehouse. Today it is called CompUSA. I was one of its founding shareholders. It was a difficult but very educational experience. In 1992 I decided to return to academics and have been with the UTD School of Management since 1997. I love my job. I have a passion for teaching and for economics.

 

My wife and I were married in December 1969. We have four children and seven grandchildren. 

 

To see more about my professional and personal life visit my website at http://www.utdallas.edu/~plewin/

Contact information:

Email:

plewin@utdallas.edu

Phone:

972-883-2729

Office

SM 3.223

Instructor's Web Site:

http://www.utdallas.edu/~plewin/

Online Course Site:

http://elearning.utdallas.edu/  (Note: requires login, see instructions below)

You can contact me anytime by phone or email, or by appointment in my office. 

Course Materials

The text I have required for this course is the following: 

Principles of Money, Banking & Financial Markets by Lawrence S. Ritter, William L. Silber and Gregory F. Udell, 12thedition, Addison, Wesley, Longman, 2010.

This is a fairly accessible text and, though it has more detail than I will cover in the lessons, the approach is similar to mine. From time to time I will suggest some optional supplementary reading. In addition to reading the recommended chapters plus supplementary material you would do best to listen carefully to the lessons. 

The following paper is also required reading. Click on it to follow the link.  You will need Adobe Acrobat to read it; it can be downloaded from their site for free. 

Inflation, Common Fallacies and Real Issues, Graduate School of Business Administration, University of the Witwatersrand and Fact and Opinion Papers, No. 3, (Second Edition, 1978).

Textbooks and some other bookstore materials can be ordered online through Off-Campus Books or the UTD Bookstore. They are also available in stock at both bookstores.

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Student Assessment: Grading/Evaluation 

There will be three online tests, two midterms (25%) and a semi-comprehensive final (50%).  The tests will be composed of multiple choice questions. In addition 5% can be added to your grade by participation.

Test 1 (covers lessons 1-5)

25%

February 15 (12 am) ‐ 17 (11:59 pm) - 1 hour

Test 2 (covers lesson 6-9)

25%

March 29 (12 am) ‐ 31 (11:59 pm)  - 1 hour

Test 3 (final, comprehensive)

50%

May 10 (12 am) ‐ 12 (11:59 pm) – 2 hours

 

The following are the grades that are possible to earn in this class.

        

A,  A-, B+, B, B-, C+, C, C-, and F, X.

 

The actual grade distribution for each test will be determined by the total class performance. I will publish a grade distribution, linking scores to grades, after each test and for the course as a whole.

Online Testing 

You can access tests by clicking the Assessments link on the course menu or see the quiz/exam icon on the designated page. Each test is timed and can be accessed only one time within the scheduled time window. Please read the on-screen instructions carefully before you click “Begin Assessment”. After each test is graded and released, you may go back to the Assessments page and click “View All Submissions” to review your test results.

 

There is a self test for each lesson. They are non-credit tests for self assessments and help you prepare for 3 tests.

 

Grades

 

You can check your grades by accessing the “My Grades” icon on Student Tools page after the grade for each item listed is released. 

 

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Course Outline

 

Lesson 1

The Nature, Origins and Development of Money as a Social Institution. – Part One

 

In this lesson we discuss, in broadly philosophical terms the functions and benefits of money.

 

Lesson 2

The Nature, Origins and Development of Money as a Social Institution. – Part Two

 

In this lesson we discuss how money came about.

 

Lesson 3

Financial Intermediation – Institutions and Instruments

 

In this lesson we gain an understanding of the role and the benefits of financial intermediaries. We look at what kinds there are and what assets they trade.

 

Lesson 4

Interest Rates – what they are and how the are determined

 

In this lesson we gain an understanding of the nature, determination and role of interest rates.

 

Lesson 5

The Structure of Interest Rates and the Determination of Present Value

 

In this lesson we learn about the universal arithmetic of Present Value and see how these concepts can also be related to explain the term structure of interest rates.

 

Test 1

 

Lesson 6

Choosing among Financial Assets: the Principles of Portfolio Selection

 

In this lesson we will review the types of financial assets available and discuss briefly the principles which guide their selection as part of a portfolio of assets.

 

Lesson 7

Understanding Financial Contracts

 

In this lesson we will learn about the relationship between types of financial contracts and the characteristics of the business environment, including business size and cultural background (ex. USA v. Japan).

 

Lesson 8

The Regulation and Evolution of Financial Intermediaries

 

In this lesson we will learn how, regulation, inflation, and technology has influenced the development of financial institutions.

 

Lesson 9

Understanding Derivatives

 

In this lesson we will learn about futures, options and swaps.

 

Test 2

 

Lesson 10

Understanding Foreign Exchange

 

In this lesson we will learn about the functioning and history of foreign exchange markets, the significance of the balance of payments and the integration of currency areas (e.g. the Euro)

 

Lesson 11

The Federal Reserve System

 

In this lesson we will learn about the history and structure of the Fed. and how it compares to other central banks. We will discuss the tools of monetary policy.

 

Lesson 12

Monetary Theory and Policy

 

In this lesson we will develop a framework for understanding and evaluating monetary policy. We will place this in the context of the history of economic thought. We will learn about the Classical economists, Keynesian economics, Monetarism and other approaches.

 

Test 3

 

 

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Reading Outline

 

PowerPoint Presentation

Coverage

Lesson 1, 2

Chapters 1, 2

Lesson 3, 4

Chapters 3, 4

Lesson 5

Chapters 4, 5

Lesson 6

Chapters 6, 7, 8, 11, 12, 13

Lesson 7

Chapters 14, 16

Lesson 8

Chapters 12, 15

Lessons 9, 10

Chapters 9, 10

Lesson 11

Chapters 17 - 21

Lesson 11

Chapters 17 - 21

Lesson 12

Chapters 22 -23 inflation paper*

Lesson 12

Chapters 26, 28, 29 inflation paper*

 

Note: Not all of the material in the chapters indicated is relevant. You should read intelligently by matching the topics with what is covered in the course lectures.

 

*Available at: http://www.utdallas.edu/~plewin/F&Opaper.pdf

 

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Course Policies

 

Make-up exams

Will be given only in exceptional circumstances

 

Extra Credit

There are no extra credit assignments

 

Late Work

N/A

 

Special Assignments

There are no special assignments

 

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Class Participation

Students are required to login regularly to the online class site. The instructor will use the tracking feature in eLearning to monitor student activities. Students are also required to participate in all class activities such as discussion board activities, chat or conference sessions and group projects.

 

Virtual Classroom Citizenship

The same guidelines that apply to traditional classes should be observed in the virtual classroom environment. Please use proper netiquette when interacting with class members and the professor.

 

Policy on Server Unavailability or Other Technical Difficulties

The university is committed to providing a reliable online course system to all users. However, in the event of any unexpected server outage or any unusual technical difficulty which prevents students from completing a time sensitive assessment activity, the instructor will extend the time windows and provide an appropriate accommodation based on the situation. Students should immediately report any problems to the instructor and also contact the UTD eLearning Help Desk: http://www.utdallas.edu/elearninghelp, 1-866-588-3192. The instructor and the UTD eLearning Help Desk will work with the student to resolve any issues at the earliest possible time.

Technical Requirements

 

In addition to a confident level of computer and Internet literacy, certain minimum technical requirement must be met to enable a successful learning experience. Please review the important technical requirements and the web browser configuration information.

 

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Course Access and Navigation

 

This course was developed using a web course tool called eLearning. It is to be delivered entirely online. Students will use UTD NetID account to login to the course at: http://elearning.utdallas.edu. Please see the details of course access and navigation information.

 

To get started with an eLearning course, please see the Getting Started: Student eLearning Orientation.

 

UTD provides eLearning technical support 24 hours a day/7 days a week. The services include a toll free telephone number for immediate assistance (1-866-588-3192), email request service, and an online chat service. The UTD user community can also access the support resources such as self-help resources and a Knowledge Base. Please use this link to access the UTD eLearning Support Center: http://www.utdallas.edu/elearninghelp.  

 

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Course Communications

 

ELearning course has built-in communication tools which will be used for course interactions and communications. Some external communication tools such as regular email and web conferencing tool may also be used during the semester. Please see more details about communication tool information.

 

Another communication tool available to students is live voice chat in the 3D virtual world of Second Life. Instructions for accessing the UTD SOM Island in Second Life can be found at http://som.utdallas.edu/somResources/eLearning/faculty/secondLife.php.

 

Interaction with Instructor: Instructor will communicate with students mainly using the Discussion board. Students may send personal concerns or questions to the instructor via email. Instructor will reply to student emails or Discussion board messages within 3 working days under normal circumstances.

 

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Student Resources

 

The following university resources are available to students:

 

UTD Distance Learning:  http://www.utdallas.edu/oee/distance/students/cstudents.htm

 

McDermott Library: Distance Learners (UTD students who live outside the boundaries of Collin, Dallas, Denton, Rockwall, or Tarrant counties) will need a UTD-ID number to access all of the library’s electronic resources (reserves, journal articles, ebooks, interlibrary loan) from off campus. For UTD students living within those counties who are taking online courses, a Comet Card is required to check out materials at the McDermott Library. For more information on library resources go to http://www.utdallas.edu/library/distlearn/disted.htm.

 

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Course Evaluation

 

As required by UTD academic regulations, every student should complete an evaluation for the course at the end of the semester. An online instructional assessment form will be made available for your confidential use. Please look for the course evaluation link on the course Homepage several weeks before the course ends.

 

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University Policies Relevant for Students:

Scholastic Honesty

The University has policies and discipline procedures regarding scholastic dishonesty. Detailed information is available on the UTD Judicial Affairs web page. All students are expected to maintain a high level of responsibility with respect to academic honesty. Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since such dishonesty harms the individual, all students and the integrity of the University, policies on scholastic dishonesty will be strictly enforced.

Course Evaluation

As required by UTD academic regulations, every student must complete an evaluation for each enrolled course at the end of the semester. An online instructional assessment form will be made available for your confidential use. A link to an online instructional assessment form will be emailed to you towards the end of the semester.

 

Online behavior - Virtual Classroom Citizenship

The same guidelines that apply to traditional classes should be observed in the virtual classroom environment. Please use proper netiquette when interacting with class members and the professor.

 

Policy on Server Unavailability or Other Technical Difficulties

The university is committed to providing a reliable online course system to all users. However, in the event of any unexpected server outage or any unusual technical difficulty which prevents students from completing a time sensitive assessment activity, the instructor will extend the time windows and provide an appropriate accommodation based on the situation. Students should immediately report any problems to the instructor and also contact the UTD eLearning Help Desk: http://www.utdallas.edu/elearninghelp, 1-866-588-3192. The instructor and the UTD eLearning Help Desk will work with the student to resolve any issues at the earliest possible time.

University Policies

General policies, including policies on Academic Honesty and Integrity.

 

Please go to http://go.utdallas.edu/syllabus-policies for these policies.

 

Student Conduct & Discipline

 

The University of Texas System and The University of Texas at Dallas have rules and regulations for the orderly and efficient conduct of their business. It is the responsibility of each student and each student organization to be knowledgeable about the rules and regulations which govern student conduct and activities.

 

The University of Texas at Dallas administers student discipline within the procedures of recognized and established due process. Procedures are defined and described in the Rules and Regulations of the Board of Regents of the University of Texas System, Part 1, Chapter VI, Section 3, and in Title V, Rules on Student Services and Activities of the Course Syllabus Page 8, University’s Handbook of Operating Procedures. Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations (SSB 4.400, 972/883- 6391).

 

A student at the university neither loses the rights nor escapes the responsibilities of citizenship. He or she is expected to obey federal, state, and local laws as well as the Regents’ Rules, university regulations, and administrative rules. Students are subject to discipline for violating the standards of conduct whether such conduct takes place on or off campus, or whether civil or criminal penalties are also imposed for such conduct.

 

 

© Peter Lewin 2012-3.