Syllabus

EFIN 403 (01) FINANCIAL MARKETS AND INSTITUTIONS

Spring 2024

1. Course Information

Instructor: Özlem Olgu, [email protected]

KU Credits: 3.00
ECTS Credits: 6.00
Prerequisite(s): Prerequisite: MFIN. 202
Class Location & Meeting
Times:
PS (Yes/No): No
DS (Yes/No): No
Lab (Yes/No): No
Language of Instruction: English
Office Hours: MON/WED 11.30-12.30

2. Course Description

Structure of financial markets and financial intermediaries; interest rates and security valuation; central
banking system and monetary policy; securities markets including money, capital, foreign exchange, and
derivatives markets; commercial banking and other depository institutions; institutional investors, including
investment banks, insurance companies, mutual funds, and pension funds; introduction to financial risk
management.

3. Course Overview

Financial markets play an important role in the efficient functioning of a market economy.
Financial Institutions are any establishments that make these markets function efficiently. The course
studies the fundamental principles that govern financial markets and institutions.
This course will provide students with an introduction to global 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. Financial Markets and Institutions will provide a
foundation for your further study of Finance, as well as an essential component of your managerial
education about the world in which business operates.
Moreover, this course explores the function, pricing, and institutional structures of financial markets. Our
intent is to understand the differences between these instruments and the institutions that operate in
today's financial markets. Rapid changes in the composition of financial instruments and institutions
mean that the content of this course must be evolving as well. This course will also provide students an
update on the recent developments in the financial markets, institutions and regulatory changes such as
applications of financial technology and Open Banking. Understanding the economic foundations of these
intermediaries, in addition to the institutional instruments, and developing your analytical and research
skills, will prepare you not only for today's job market, but will also help to increase your educational
flexibility in adapting to future changes.

4. Course Learning Outcomes (CLOs):

CLO # Upon successful completion of this course, students will be able to…
 Apply concepts relevant to financial markets and financial institutions, such as the flow of
1
funds, levels of interest rates and interest rate differentials, to current events or topical issues.
Determine and analyze the appropriate measures of risk and return for various financial
2
instruments.
Understand the mechanics and regulation of financial securities exchanges and determine
3
how the value of stocks, bonds, and securities are calculated.
Identify and evaluate the role symmetric versus asymmetric information plays in the structure
4
and operation of the financial system information.
5 Understand recent developments and impact of their applications in financial markets.
Research and analyze specific problems or issues related to financial markets and
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institutions.
Explore the international integration of international financial markets and analyze the
7
implications for financial managers.

5. Assessment Methods

Method Description Weight %

Midterm Exam 35.00
Final Exam 25.00
Quiz VIA CONNECT 20.00
Participation in class participation to discussion sessions 15.00
Attendance 5.00
Total: 100.00

6. Instructional Material and Learning Resources

• Financial Markets and Institutions, Edition: 8

Author: Saunders, A. and Cornett, M.
Publisher: McGraw Hill (Year: 2020)
Material Type: Textbook
Material Status: Required

• Connect, Edition: 8
Author: Saunders, A. and Cornett, M.
Publisher: McGraw Hill (Year: 2020)
Material Type: Website
Material Status: Required
Additional Notes: online materials and quizzes

• Active Use of Course Page on Blackboard: https://ku.blackboard.com/

• KOLT Tutoring: No Service Available

7. Course Schedule

Meeting Times Subject

8. Student Code of Conduct and Academic Grievance Procedure

Student Code of Conduct

Statement on Academic Honesty with Emphasis on Plagiarism

Academic Grievance Procedure

9. Course Policies

Important Policy IssuesEthics and ProfessionalismFinance professionals are responsible for the integrity of
the financial system. High standards of ethics and professionalism are an integral part of the job. They are
key to the integrity of the whole financial system. I expect that you will at all times exhibit high standards of
professionalism in this course. In the context of this course, professionalism consists of:-class attendance,-
being on time for class,-class participation,-not talking out of turn,-being respectful to others,-your overall
behavior as a future business professional.You are expected to attend class; scheduling other
appointments during class sessions is unacceptable. Please arrange your personal schedules so that late
arrivals and early departures are avoided. Chronic lateness and chatting with other students in class are
unacceptable. Repeated walking in and out of class is distracting to your classmates and to me and such
behavior will not be tolerated.

10. Other

Tentative Course Content

Part 1:
• Review of Syllabus and Introduction to the Course
• Overview of the Financial System and the World of Finance
• Financial Intermediation and Financial Markets
• Financial Institutions
• Interest Rate Determination

Part 2:
• Money Markets
• Bond Markets
• Stock Markets
• Foreign Exchange Market

Part 3:
• Managing Risk: Derivatives
o Futures
o Options
o Swaps

Part 4:
• Banking Industries and their performance
o Commercial Banks
o Savings Banks
o Investment Banks
o Islamic Banks
Part 5:
• Financial Technology and Its Impact on Financial Institutions
• Open Banking
• Financial Ethics