a. Introduction to the Course

This course will provide students with an introduction to financial markets and an evaluation of the institutions, instruments, and participants involved in the industry. The mainstream markets to be evaluated include the equity, money, bond, futures, options, and exchange rate markets. The subject systematically reviews each of the mainstream financial markets and investigates the various institutional participants and the different types of financial instruments offered an overview of the ideas, methods, and institutions that permit human society to manage risks and foster enterprise.

b. Course Pre-Requisite

Specifically, there are no pre-requisites for this course, however, basic knowledge of finance and accounting concepts will be very helpful.

c. Learning Outcomes

1. To understand the functions, structure, and work settings of the financial markets
2. To understand and explain the differences between the various financial instruments and securities
3. To explain the mechanics of the Futures market and evaluate the various hedging strategies using Futures

d. Textbooks:

• Mishkin, F. S., & Money, B. (1995). Financial Markets. Institutions and Money (7th ed.). Harper Collins Publishers.
• Fabozzi, F. J., Modigliani, F., & Jones, F. J. (2013). Foundations of Financial Markets and Institutions. (4th ed.). Prentice-Hall.

e. PPT/Handouts

The PPTs/Handouts will be provided for every lecture where it will be necessary. Further, the PPTs/Handouts can be found in the relevant lesson section of the LMS.

f. System of Evaluation

Midterm = 25%

Final = 50%

Sessional (Class assignment + Final Project) = 25%

g. Lesson Plan

1. What this course will do for you and your purpose to attend. Scheme of study Why Study Financial Markets (Mishkin chapter 1)
2. Overview of the Financial System (Mishkin Chapter 2)
3. Interest Rate and Its Role in Valuation (Mishkin chapter 3)
4. Why Do Interest Rate Change? (Mishkin chapter 4)
5. How do Risk and Term Structure Affect Interest Rate (Mishkin chapter 5)
6. Why Do Financial Institutions Exist (Mishkin Chapter 7), Risk and Financial Market Crisis (Mishkin Chapter 8)
7. Institution of Insurance. (Fabozzi Chapter 6), Institutions for Portfolio Diversification (Fabozzi Chapter 7)
8. The market for Government and Corporate Securities, Organization and Structure of Market (Fabozzi Chapter 13 &14)
9. Introduction to Financial Instruments; Collateral Present Value and Vocabulary of Finance
10. Mechanics of Futures Markets (John C Hull); Hedging Strategies using futures
11. Interest rates and Determinants of forwarding and Future prices
12. Interest Rate Futures and Swaps (John C Hull)
13. Mechanics of Options Markets (John C Hull)
14. Insurance: The Archetypal Risk Management Institution (John C Hull)
15. Financial Instruments and Major World Financial Crisis (John C Hull)
16. Recent Financial Crashes, reasons, and preventions

h. Date and Time of Class

Wednesday 11:00 AM- 12:30 PM (Regular)

Thursday 8:00 AM – 9:30 AM (Regular)

Wednesday 3:30 PM – 5:00 PM (Self Support)

Thursday 12:30 PM – 2:00 PM (Self Support)