EPOKA UNIVERSITY
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF BANKING AND FINANCE
COURSE SYLLABUS
2021-2022 ACADEMIC YEAR
COURSE INFORMATIONCourse Title: FINANCIAL INSTITUTIONS AND MARKETS |
| Code | Course Type | Regular Semester | Theory | Practice | Lab | Credits | ECTS |
|---|---|---|---|---|---|---|---|
| BAF 321 | B | 5 | 4 | 0 | 0 | 4 | 5 |
| Academic staff member responsible for the design of the course syllabus (name, surname, academic title/scientific degree, email address and signature) | NA |
| Main Course Lecturer (name, surname, academic title/scientific degree, email address and signature) and Office Hours: | Dr. Etleva Gjonça egjonca@epoka.edu.al , Email for appointments |
| Second Course Lecturer(s) (name, surname, academic title/scientific degree, email address and signature) and Office Hours: | NA |
| Teaching Assistant(s) and Office Hours: | NA |
| Language: | English |
| Compulsory/Elective: | Compulsory |
| Study program: (the study for which this course is offered) | Bachelor in Banking and Finance (3 years) |
| Classroom and Meeting Time: | Monday > E214 at 13:30 - 17:15 & Tuesdays > E214 at 14:30 - 16:15 |
| Code of Ethics: |
Code of Ethics of EPOKA University Regulation of EPOKA University "On Student Discipline" |
| Attendance Requirement: | |
| Course Description: | BAF 321- Financial Institutions and Markets: This course is about the financial institutions, markets, and instruments that compose today's global financial markets and the risks associated with them. Students will gain a thorough understanding of how financial institutions are managed, how funds are raised, how financial instruments are priced, how risks are managed, and why financial institutions and markets are prone to failure. |
| Course Objectives: | This course is intended to help you understand the role of financial institutions and markets play in the business environment that you will face in the future. It also helps you to develop a series of applications of principles from finance and economics that explore the connection between financial markets, financial institutions and the economy. On the financial markets side, we will learn the term structure of interest rates, stocks, principals of derivatives, and currencies. On the institutions side, we will learn commercial banks, investment banks, insurance companies, mutual funds, the Federal Reserve Systems and their role of in the economy |
|
BASIC CONCEPTS OF THE COURSE
|
| 1 | Financial markets are markets in which funds are transferred from people who have an excess of available funds to people who have a shortage. |
| 2 | Financial institutions are what make financial markets work. |
| 3 | A primary market is a market where new security, bond or stock, issues sold to initial buyers by the corporation or government agency borrowing funds. |
| 4 | A secondary market is a financial market in which securities that have been previously issued can be sold. |
| 5 | The concept of present value (or present discounted value) is based on the commonsense notion that a dollar of cash flow paid to you one year from now is less valuable to you than a dollar paid to you today. |
| 6 | Real interest rate is an Interest rate that is adjusted for expected changes in the price level. |
| 7 | An asset is a piece of property that is a store of value. |
| 8 | Financial Market Hypothesis states that prices of securities in financial markets fully reflect all available information. |
| 9 | Financial crises are major disruptions in financial markets characterized by sharp declines in asset prices and firm failures. |
| 10 | Central banks are government authorities in charge of monetary policy. |
|
COURSE OUTLINE
|
| Week | Topics |
| 1 | Introduction & Syllabus |
| 2 | Ch. 1 - Why study financial markets and Institutions & Ch. 2 - Overview of the financial system; Why study financial markets? Why study financial institutions? Function and Overview of the financial markets; Structure of financial markets: Function of financial intermediaries |
| 3 | Ch. 3 - Interest Rates & Ch. 4 - Why do interest rates change; Measuring interest rates: Distinction between real and nominal interest rates; Distinction between interest rates and returns; Determinants of asset demand; Supply and demand in the bond market |
| 4 | Ch. 5 - Risk and Term Structure & Ch. 6 - Are financial markets efficient; Risk structure of interest rates: Term structure: Efficient market hypothesis: Evidence on the hypothesis |
| 5 | Ch. 7 - Financial Institutions & Ch. 8 - Financial Crises: Basic facts about financial structure: Transaction costs; Asymmetric information; What is a financial crisis? Dynamics of a financial crisis |
| 6 | Ch. 11 - Money Market & Ch. 12. - Bond Market; The Money Markets Defined; Why do need money markets? The Purpose of the Money Markets;Purpose of the Capital Market;Capital Market Participants |
| 7 | Ch. 13 - Stock Market & Review; Investing in Stocks;Computing the Price of Common Stock |
| 8 | Midterm |
| 9 | Review & Ch. 9 - Central Bank; Origins of the central banking system: Variations in the structure and functions: Structure and independence of central banks |
| 10 | Ch. 10 - Conduct of monetary policy;How Fed Actions Affect Reserves in the Banking System; Conventional Monetary Policy Tools |
| 11 | Ch. 20 - The Mutual Fund Industry; The Growth of Mutual Funds;Benefits of Mutual Funds |
| 12 | Ch. 21 - Insurance & Pension Funds; Insurance Companies; Fundamentals of Insurance; Types of Insurance;Types of Pensions |
| 13 | Ch. 22 - Investment Banking, Broker & Dealers; Investment Banks;Securities Brokers and Dealers |
| 14 | Presentations and Course Review |
| Prerequisite(s): | |
| Textbook(s): | Financial Markets and Institutions ~ Mishkin & Eakins |
| Additional Literature: | |
| Laboratory Work: | |
| Computer Usage: | |
| Others: | No |
|
COURSE LEARNING OUTCOMES
|
| 1 | discuss theories that underneath the term structure of interest rates |
| 2 | discuss efficient market hypothesis related to stock pricing |
| 3 | understand a stylized bank’s balance sheet and discuss how risks are managed in banks |
| 4 | discuss facts of the insurance business, mutual funds and investment banks |
| 5 | grasp the basic features of options and futures and understand how financial institutions use them for risk management |
| 6 | discuss the main functions of the Fed and tools they use to affect the economy |
| 7 | know how currency value is determined the short run and long run |
|
COURSE CONTRIBUTION TO... PROGRAM COMPETENCIES
(Blank : no contribution, 1: least contribution ... 5: highest contribution) |
| No | Program Competencies | Cont. |
| Bachelor in Banking and Finance (3 years) Program | ||
| 1 | The students gain the ability to look at the problems of daily life from a broader perspective with an increased awareness of the importance of moral/ethical considerations and professional integrity in the workplace. | 5 |
| 2 | They develop their knowledge and understanding of banking and finance including concepts, theories, and analytical tools that serve both in national and international markets. | 5 |
| 3 | They gain an understanding of the role of financial management in business firms and the essentials of corporate finance and further develop their knowledge in the field. | 4 |
| 4 | They are able to apply valuation models to estimate the price of different financial assets, measure risk and describe the risk-return tradeoff. | 5 |
| 5 | They are provided with the knowledge and understanding of the regulatory framework and functioning of banking system and central banking as well as international banking system. | 4 |
| 6 | They are able to understand and use fundamental economic theories and tools to solve economic problems in banking and financial services industry. | 3 |
| 7 | They have the ability to develop and utilize accounting, financial and economic data as well as other information to solve different business problems by making use of basic mathematical and statistical models. | 4 |
| 8 | They are expected to develop their numerical and IT skills as well as knowledge of databases in order to address the significant development in the delivery and use of financial services known as FinTech. | 3 |
| 9 | They develop their ability to think critically, do research, analyze, interpret, draw independent conclusions, and communicate effectively, both individually and as part of a team. | 4 |
| 10 | They are provided with opportunities to acquire the necessary skills and competencies to develop professionalism in the banking and financial services industry or to move on to further study within the discipline. | 4 |
|
COURSE EVALUATION METHOD
|
| Method | Quantity | Percentage |
| Midterm Exam(s) |
1
|
25
|
| Project |
1
|
15
|
| Final Exam |
1
|
30
|
| Attendance |
10
|
|
| Other |
1
|
20
|
| Total Percent: | 100% |
|
ECTS (ALLOCATED BASED ON STUDENT WORKLOAD)
|
| Activities | Quantity | Duration(Hours) | Total Workload(Hours) |
| Course Duration (Including the exam week: 16x Total course hours) | 16 | 3 | 48 |
| Hours for off-the-classroom study (Pre-study, practice) | 16 | 1 | 16 |
| Mid-terms | 1 | 20 | 20 |
| Assignments | 2 | 8 | 16 |
| Final examination | 1 | 25 | 25 |
| Other | 0 | ||
|
Total Work Load:
|
125 | ||
|
Total Work Load/25(h):
|
5 | ||
|
ECTS Credit of the Course:
|
5 | ||
|
CONCLUDING REMARKS BY THE COURSE LECTURER
|
|
At the end of the course students are expected to have acquired a comprehensive background of how financial institutions are managed, how funds are raised, how financial instruments are priced, how risks are managed, and why financial institutions and markets are prone to failure. Meanwhile, students are expected to adhere to the ethical code of conduct of the EPOKA University. |