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Course Outline Financial Markets and Institutions BANK 1005 Study Period 2 - 2017 Internal - City West Campus

Introduction Welcome Households, businesses and governments worldwide rely on the use of the financial system for investment, funding, savings, risk management and policy decisions. In this Financial Markets and Institutions course you will learn about the role of these 'players' in the functioning of financial markets. You will learn about the securities traded in the various financial markets; particularly the equity, money and bond markets. You will develop an understanding of these markets, in part, by developing a vocabulary of financial terms and concepts. In addition, you will be exposed to some key ideas in financial theory. Your aim should be to achieve real and deep understanding about the workings of the financial markets, their importance and uses to various parties. You should also aim to master the meaning of the financial concepts, learn the language of the marketplace, work with analytical tools (including some basic calculations), and understand the issues relevant to making sound financial decisions. You should be able to explain clearly, and in some depth, what you learn to show real understanding. It is important to keep up with the daily financial news and events using the various media sources and publications that are widely available and often suggested in the learning resources. This course gives you an opportunity to form a solid foundation for a lifetime journey of learning about events in the financial system and its innovations. You are likely to experience, read about or watch many of these events in the news and other media. Almost everyone is affected by the happenings in the financial markets and their institutions—reason enough to learn about them! The structure and tools provided in this course can be used to assist you in your personal and professional success in almost any career. Enjoy this journey! Hao Zhou Course Coordinator

Course Teaching Staff Primary Coordinator:

Mr Hao Zhou

Location:

School of Commerce WL2-30

Telephone:

+61 8 8302 7622

Fax:

+61 8 8302 0990

Email:

[email protected]

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Staff Home Page:

people.unisa.edu.au/Hao.Zhou

* Please refer to your Course homepage for the most up to date list of course teaching staff.

School Contact Details School of Commerce Physical Address:

Level 2, Room 57, Way Lee Building (WL) 37-44 North Terrace City West Adelaide 5000

Postal Address:

University of South Australia School of Commerce City West Campus GPO Box 2471 Adelaide 5001

Phone:

+61 8 8302 0436

Phone:

+61 8 8302 9047

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Course Overview Prerequisite(s) MATH 1053 Quantitative Methods for Business

Corequisite(s) There are no corequisite courses to be completed in conjunction with this course.

Course Objectives On completion of this course, students should be able to: CO1. Identify and describe the characteristics of key financial instruments CO2. Describe the functions, operations and roles of the financial markets, financial institutions and key participants. CO3. Explain the concepts of risk and return and their measurement. CO4. Price financial instruments using simple valuation models CO5. Display a comprehension of basic theories of interest rate determination, and the term structure of interest rates Upon completion of this course, students will have achieved the following combination of Graduate Qualities and Course Objectives: Graduate Qualities being assessed through the course GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 CO1

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CO2

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CO3

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CO4

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CO5

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Graduate Qualities A graduate of UniSA: GQ1. operates effectively with and upon a body of knowledge of sufficient depth to begin professional practice GQ2. is prepared for life-long learning in pursuit of personal development and excellence in professional practice GQ3. is an effective problem solver, capable of applying logical, critical, and creative thinking to a range of problems GQ4. can work both autonomously and collaboratively as a professional GQ5. is committed to ethical action and social responsibility as a professional and citizen GQ6. communicates effectively in professional practice and as a member of the community GQ7. demonstrates international perspectives as a professional and as a citizen

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Course Content Time value of money: principles of compounding and discounting. Financial markets: functions and operations of the financial markets for debt and equity securities. Financial instruments: properties, uses and valuation of typical financial instruments: equities; bonds; bills and discount-type instruments. Financial institutions: operations and role of banks and managed/superannuation funds: bank regulations. Risk and financial instruments: identifying and describing risks.

Teaching and Learning Arrangements Lecture Tutorial

2 hours x 10 weeks 1.5 hours x 10 weeks

Unit Value 4.5 units

Additional assessment requirements To obtain a pass grade overall students will normally need to achieve at least 40% in the final examination.

Further Course Information Please note that the information regarding conceded and terminating passes in the Additional Assessment Requirements section is incorrect due to a system error. Conceded and terminating passes are unavailable.

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Learning Resources Textbook(s) You will need continual access to the following text(s) to complete this course. The library does not hold multiple copies of the nominated text books. It is strongly recommended that you purchase the book(s). An eBook version may be available but please check with the library as availability is limited and dependent on licence arrangements. http://www.library.unisa.edu.au Hunt, B & Terry, C 2015, Financial Institutions and Markets, 7th Edition, Cengage Learning, South Melbourne, Australia..

Reference(s) FINANCIAL CALCULATOR A financial calculator is required, and the SHARP EL-738 financial calculator is recommended. Recommended References The following are some recommended references to enhance your learning and its applications in the real world. These text books are not required readings, but you may use them based on your interest or your need to look for any additional or missing information. Textbooks Mishkin, Frederic S & Eakins, Stanley G (2012) Financial markets & institutions, 7th edition, Addison-Wesley, USA Mishkin, Frederick S (2010) The economics of money, banking and financial Markets, 9th edition, Pearson Education, Boston. [These are American books that are presented at a level similar to that required for this course. Although their focus is on the US financial markets, the international markets are also considered.] Petty, JW et al (2012) Financial management: principles and applications,6th edition, Pearson Education, Australia [This book covers corporate finance and is used for some other finance courses at UniSA.] Viney, Christopher (2011) Financial market essentials, McGraw-Hill Australia, North Ryde [This Australian book is presented at a level similar to that required for this course and is "a comprehensive introduction to the dynamic world of finance".] Newspapers and News Magazines (Highly Recommended) You should regularly read the financial news in the daily newspapers, such as The Australian Financial Review (AFR) and The Australian, to keep in touch with happenings in the financial markets and business world. The AFR’s daily Companies and Markets liftout is a particularly useful source of relevant information and news about financial markets. This newspaper also produces the Financial Review Portfolio section once a week. The Financial Review’s Smart Investor is a monthly magazine with news and articles about the financial markets, investing and firms. The weekly Wealth supplement in The Australian and the Sunday morning ABC television program Inside Business are also recommended. The ABC television daily program The Business covers events in the markets and news about companies and is available on their website the next day. In addition the weekly, The Economist (first published in 1843), includes international financial, economic, political news and other articles of a high standard. Journals and Periodicals (Required and Recommended) There are several academic journals that cover the financial system; however, the published finance research tends to be rather difficult to read for beginners. The following periodicals and journals have a more practical orientation and are relatively easy to read. Journal of Applied Corporate Finance (Leading research is explained in reasonably plain words that stress the practical applications.) Financial Management Bulletin – Reserve Bank of Australia (A 'must read' available monthly from the RBA web site and contains informative articles as well as financial data.) Some other key advanced journals are: Journal of Finance, Journal of Financial Economics, Journal of Accounting Research, Journal of Accounting and Economics, Journal of Economic Perspectives.

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Other Online Resources (Required and Recommended) You will find more resources through the course home page. The web sites of the Reserve Bank of Australia (RBA), Australian Stock Exchange (ASX), New York Stock Exchange (NYSE), Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission (ASIC), Standard & Poor’s, Bloomberg are particularly recommended for regular visits and use during the study period. More web sites may be indicated on the course home page and you will undoubtedly discover others yourself. Catalogues and databases (Recommended) Reserve Bank of Australia (a key source of Australian financial data) Australian Bureau of Statistics (another source of financial and business data) Annual Report Collection (a good source of annual reports of Australian companies) Thomson One Banker (a useful database for financial data) Readings (Required) Selected readings (journal and periodical articles) are usually provided through the UniSA library’s e-Reader.

Materials to be accessed online

learnonline course site All other course related materials can be accessed through your learn online course site which you will be able to access from the my Courses section in myUniSA.

myUniSA All study related materials can be accessed through: https://my.unisa.edu.au

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Assessment Assessment Details Details of assessment submission and return are listed under each assessment task. Assessment tasks will be returned to you within two to three weeks of submission. If the Course Coordinator allows submissions in hard copy format, you will be required to attach an Assignment Cover Sheet which is available on the learnonline student help and in myUniSA.

Assessment Summary #

Form of assessment

Length

Duration

Weighting

Due date (Adelaide Time)

Submit via

1

Continuous assessment

N/A

N/A

20%

6 Apr 2017, 4:00 PM

learnonline, CO1, CO2, CO3, Assignment CO4, CO5 1 - Individual Assignment

2

Assignment

1500 words

N/A

20%

8 May 2017, learnonline, CO1, CO2, CO3, 4:00 PM Assignment CO4 2 - Group work in groups of up to 3 students

3

Examination

N/A

2.5 hours

60%

Other - TBA

In person

Objectives being assessed

CO1, CO2, CO3, CO4, CO5

Feedback proformas The feedback proforma is available on your learn online course site. It can be accessed via the Feedback Form link in the Course Essentials block.

Assessments Individual Assignment (Graded) This assignment will cover topics 1-3. This assignment must be completed individually by each student. The assignment will consist of some multiple-choice questions and questions involving calculations and short essay style discussions. It may involve finding and using information from various sources. The questions will explore your understanding of the key concepts, financial calculations and their application. Extensions, re-marking and re-submission are NOT available on this assessment. Please read carefully the notes above which apply in case the test is not attempted as required. The weighting for any assignment not attempted for an acceptable reason (such as an affecting medical condition, but not work, social or sporting commitments) that is adequately evidenced within one day of the due date, will be added to the examination weighting. Otherwise, a zero mark will be recorded for any missed assignment. Feedback on this assignment will be provided on the Feedback form, a copy of which will be available on the course web site with the assessment document. In addition, detailed solutions and/or answer guidelines will be provided on the course web site.

Group work in groups of up to 3 students (Graded) The assignment will cover a selection from what is covered in Topics 1 to 3 but the main focus is the collection, use and examination of financial information with an application of theory. This assignment should be completed in groups of up to three students (that is, between one to three students

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per group). The assignment will be based on calculations using Excel, the presentation of information and discussion requiring analysis and argument. The work involves the use of information from the financial markets and basic Excel skills. Details will be provided separately in a document available on the course website. Re-marking, re-submission and extensions are NOT available for this assessment. This assessment should be submitted using the online facility as specified in the assessment document, together with the cover sheet, by the due date. Feedback on this assignment will be provided on the Feedback form, a copy of which will be available on the course website with the assessment document.

Examination The examination will assess all the content of this course. The duration of the examination will be two and a half hours plus ten minutes of reading time. You are permitted to take into the examination a financial calculator and one A4 size sheet of paper that is handwritten and/or typed on both sides (with your selection of formulas and/or notes). All information must be printed on the one sheet and any attachments or pasted slips are not allowed. You must make sure that your sheet of information meets the requirements precisely (one A4-sized sheet handwritten and/or typed on both sides without any attachments) because you will not be allowed to use it otherwise. Show your name and student number on the front page at the top left hand side of your A4 sheet. A financial calculator, one A4 sheet (as indicated above) and a bi-lingual print dictionary are allowed into the examination. These items must not be enhanced or tampered with in any way. Past examination papers are not available for this course. However, sample examination questions (based partly on the past examinations, with suggested solution guidelines) will be provided later in the study period through the course website.

Exam arrangements Students will receive advance notice of scheduled examination. All students are required to sit their examination at the scheduled date, time and location irrespective of any conflict with a planned holiday or special event. Internal students are required to sit their examination on-campus or at the central exam venue. More information about examination procedures and arrangements for students can be found by consulting the relevant policy http://w3.unisa.edu.au/policies/manual/default.asp (Section 6)

Supplementary Assessment Supplementary assessment or examination offers students an opportunity to gain a supplementary pass (SP) and is available to all students under the following conditions unless supplementary assessment or examination has not been approved for the course: 1. 2.

if the student has achieved a final grade between 45-49 per cent (F1) in a course if a student who has successfully completed all of the courses within their program, with the exception of two courses in their final study period, a supplementary assessment or examination may be granted where the final grade in either or both of these courses, is less than 45 percent (F1 or F2)

More information about supplementary assessment is available in section 7.5 of the Assessment Policy and Procedures Manual. http://w3.unisa.edu.au/policies/manual/default.asp

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For this course and all courses undertaken within the School of Commerce, students who receive an F2 grade (below 40) will not be awarded a supplementary examination or assessment. Note: special consideration cannot be granted for a supplementary assessment or examination (APPM 7.7.6).

Important information about all assessment All students must adhere to the University of South Australia's policies about assessment: http://w3.unisa.edu.au/policies/manual/default.asp.

Students with disabilities or medical conditions Student with disabilities or medical conditions or students who are carers may be entitled to a variation or modification to standard assessment arrangements. See Section 7 of the Assessment Policy and Procedures Manual (APPM) at: http://w3.unisa.edu.au/policies/manual/default.asp Students can register for an Access Plan with UniSA Disability Service. It is important to make contact early to ensure that appropriate support can be implemented or arranged in a timely manner. See the Disability Hub for more information: http://www.unisa.edu.au/Disability/Current-students Students are advised there is a deadline to finalise Access Plan arrangements for examinations. Further information is available at: http://i.unisa.edu.au/campus-central/Exams_R/Before-the-Exam/Alternative-examarrangements/

Deferred Assessment or Examination Deferred assessment or examination is available for the course Note: special consideration cannot be granted for a deferred assessment or examination (APPM 7.7.6).

Special Consideration Special consideration is available. Special Consideration Exams The Assessment Policies and Procedures Manual (APPM 2017) defines 'Unexpected or exceptional circumstances are those which were outside the control of the student and/or for which there was no opportunity to prepare in advance.' Special consideration will only be granted where something unforeseen and unexpected happens either on the day of the exam or during the exam. For example, students who are ill for the first time before the exam begins and choose to sit the exam will not be granted special consideration as they have had the opportunity to apply for a deferred exam instead. A special consideration application will be assessed if: 1. An Exam Incident Report is completed in conjunct...