UNIVERSITY OF CAPE COAST

COLLEGE OF HUMANITIES AND LEGAL STUDIES

SCHOOL OF ECONOMICS
DEPARTMENT OF APPLIED ECONOMICS
SECOND SEMESTER, 2019/2020
ECF 104: PERSONAL FINANCIAL DECISION MAKING

Credit Hours: 3
Lecturer: Kwabena Nkansah Darfor
Email: [email protected]/[email protected]
Blog: blogs.ucc.edu.gh/kdarfor
Skype: kdarfor76
Office: Room 124
Visiting Hours: Mondays 1.00pm - 2.00pm

Course Description
The course introduces students to the skills for making financial decisions that yield
optimal returns.

a. Course Objectives
1. The goal of this course is to expand students’ knowledge on financial literacy.
2. The course also aims at training students to acquire basic skills on financial
planning.

b. Course Content
1. Overview of a Financial Plan
How You Benefit from Personal Finance
Components of a Financial Plan
How Financial Plan Decisions Affect Your Cash Flows
Developing the Financial Plan
2. Planning with Personal Financial Statements
Personal Cash Flow Statement
Factors That Affect Cash Flows
Creating a Budget
Personal Balance Sheet
How Budgeting Fits Within Your Financial Plan
3. Applying Time Value Concepts
Importance of Time Value of Money
Future Value of a Currency Amount
Present Value of a Dollar Amount
Future Value of an Annuity

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 Present Value of an Annuity
Using Time Value to Estimate Savings
How Saving Fits within your Financial Plan
4. Banking and Interest Rates
Types of Financial Institutions
Banking Services Offered
Selecting a Financial Institution
Interest Rates on Deposits and Loans
Why Interest Rates Change
How Banking Services Fit Within Your Financial Plan
5. Managing Your Money
Background on Money Management
Money Market Investments
Risk of Money Market Investments
Risk Management
How Money Management Fits within your Financial Plan
6. Assessing and Securing Your Credit
Background on Credit
Credit Bureaus
Identity Theft: A Threat to Your Credit
How Credit Assessment and Security Fits within your Financial Plan
7. Managing Your Credit
Credit Cards
Characteristics of Credit Cards
Finance Charges
Estimating Credit Repayment
Credit Card Statement
Regulation of Credit Cards
Tips on Using Credit Cards
How Credit Management Fits Within Your Financial Plan
8. Personal Loans
Background on Personal Loans
Interest Rates on Personal Loans
Car Loans
Purchase versus Lease Decision
Student Loans
Home Equity Loans
Payday Loans
How Personal Loans Fit Within Your Financial Plan
9. Life Insurance

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 Background on Life Insurance
Types of Life Insurance
Determining the Amount of Life Insurance
Contents of a Life Insurance Policy
Selecting a Life Insurance Company
How Life Insurance Fits Within Your Financial Plan
10. Investing Fundamentals
Types of Investments
Investment Return
Risk from Investing
Trade-Off between Return and Risk
Learning from Investment Mistakes
How Investments Fit within your Financial Plan
11. Investing in Stocks
Stock Exchanges
Stock Quotations
Purchasing and Selling Stocks
How Stock Investment Methods Fit Within Your Financial Plan
12. Investing in Bonds
Background on Bonds
Types of Bonds
Return from Investing in Bonds
Risk from Investing in Bonds
Bond Investment Strategies
How Bond Decisions Fit Within Your Financial Plan
13. Investing in Mutual Funds
Background on Mutual Funds
Types of Mutual Funds
Return and Risk of a Mutual Fund
Selecting Mutual Funds
Quotations of Mutual Funds
Diversification among Mutual Funds
How Mutual Funds Fit Within Your Financial Plan
14. Asset Allocation
How Diversification Reduces Risk
Strategies for Diversifying
Asset Allocation Strategies
Your Asset Allocation Decision
How Asset Allocation Fits Within Your Financial Plan
15. Retirement Planning
Social Security
Employer-Sponsored Retirement Plans
Your Retirement Planning Decisions
Retirement Plans Offered by Employers
Retirement Plans for the Self-Employed
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 Individual Retirement Accounts
Annuities
Estimating Your Future Retirement Savings
How Retirement Planning Fits Within Your Financial Plan

c. Mode of delivery
The mode of delivery of the course would take the form of face-to-face lectures,
class presentations, hands-on exercises, case studies, field trips among others.

Main Texts
1. Kapoor, J. R., Dlabay, L. R. & Hughes, R. J. (2016). Focus on Personal Finance:
An Active Approach to Help You Achieve Financial Literacy, 5th edition, McGraw-
Hill Inc.
2. Madura, J. (2014). Personal Finance, 5th edition, New Jersey: Pearson Education
Inc.

Supplementary Texts
3. Chambers, C.P., Echenique F & Saito K. (2016). Testing theories of financial
decision making, Conference Proceedings, National Academy of Sciences.
California USA.
4. Robertson, J. (2016). Financial Decision Making, 2nd edition, London: Wiley
Press.
5. Billingsley, R. S., Gitman, L. J. & Joehnk, M. D. (2018). Personal Finance,
Boston: Cengage Learning.
6. Dworsky, L. N. (2009). Understanding the Mathematics of Personal Finance: An
Introduction to Financial Literacy, New Jersey: John Wiley & Sons Inc.
7. Ingersoll, J. E. (1987) Theory of Financial Decision Making, Yale: Yale University
Press.

Mode of Assessment
Evaluation of your performance will be based on a series of weekly assignments, two in-
class tests and a final examination. The weights are as follows:
1. Two Quizzes (25%)
2. Assignments (15%)
3. One End-of-Semester Examination (60%)

Academic Integrity
Please make yourself familiar with the University's policy on plagiarism and cheating
and examination impersonation. Plagiarism or any other form of cheating in
examinations or quizzes is subject to serious academic penalty.
Students will not be permitted to write make-up quizzes or hand in assignments late,
except for documented medical or compassionate reasons. Failure to take a quiz or
assignment without express permission will lead to the award of a mark of zero.

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