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FINANCIAL INSTITUTIONS and MARKETS (FIN 340.101)
DR. PAWAN MADHOGARHIA – FALL 2017
Mission Statement: The Graham School of Business at York College provides distinctive, high
caliber business education that prepares individuals for successful careers and personal growth.
We provide students with an education that encourages intellectual development while also
meeting the specific needs of the business community through a dynamic, experiential business
curriculum.
Vision Statement: The Graham School of Business at York College will be recognized as a
leading business educator in the Mid-Atlantic region. Our business students will be regarded as
the best and most sought after graduates due to exceptional academic preparation,
professionalism and integrated business problem-solving experiences.
Course: Financial Institutions – FIN 340.101; CRN: 10641
Faculty: Pawan Madhogarhia, Ph.D., CFA
Office (location) / Office Hours: WBC 222; MWF: 2 – 3 p.m. and T: 9:30 – 11:30 a.m.
Email: pmadhoga@ycp.edu
Class Day/Time/Location: MWF/1:00 to 1:50 p.m./WBC 221
Course Prerequisites: Completion of ECO 200 and FIN 300 with grades of 2.0 or higher.
Credit Hours: 3
Textbook: Financial Markets and Institutions by Jeff Madura, 12th edition, ISBN:
9781337099745
Other Resources: A financial calculator is required--one that can calculate Present and Future
values of Annuities: Texas Instruments BAII PLUS or BA II PLUS Professional. Student is
responsible for learning how to use. Please note that this calculator is a requirement to pass this
course. You will be required to familiarize yourself with the available tools in the NASDAQ
Trading Lab such as Morningstar Direct, Bloomberg and StockTrak and use these tools for
analytical and decision-making purposes.
Most, if not all of you, must be wondering about the direction of the stock market, bond market,
housing market, and the U.S. dollar. There would be ample opportunities in this class to discuss
these topics in an analytical framework. In the real world of decision-making there may not be
yes/no answers – rather the answers may depend on contingencies. Hence, class participation
is essential in this class. The relevant current topics and controversies will be discussed. Hence,
you are required to read the chapter and any additional assigned reading before coming to
class. Additionally, you are required to read some business magazines, newspapers or
business news websites to keep yourself updated about the current events in the business
world and relate theory to practice. Some of the recommended websites are:
http://www.marketwatch.com/
http://www.businessweek.com/
FINANCIAL INSTITUTIONS and MARKETS (FIN 340.101)
DR. PAWAN MADHOGARHIA – FALL 2017
http://online.wsj.com/home-page
http://finance.yahoo.com/
You will need to subscribe to the ProBanker Simulation. The details will be provided in the class.
There may be additional fees to subscribe to this simulation
Course Description (from the catalog): This course provides a study of the major financial
institutions and the role that major institutional investors serve in the current financial system.
Topics include commercial banks, mutual funds, securities firms, insurance companies, and
pension funds.
Instructor’s Educational Philosophy: The primary goal of this course is to provide you with a
basic understanding and framework of how financial institutions acquire, allocate, and control
their financial resources to maximize shareholder value. This course should help you to
integrate a series of finance and economics principles that explore the connection between
financial markets, financial institutions and the economy. My goal is to provide you with an
understanding of important concepts through experiential learning. There will be lot of online
quizzes, in-class assignments, simulations, and an extensive project. You will be expected to
build on the concepts that you have already learned in your prerequisite courses. There will be
extensive use of trading lab software such as Morningstar, Bloomberg etc.
Course Core Learning Objectives: Upon successful completion of this course you should be
able to:
Discuss the term structure of interest rates
Evaluate the relationship between interest rates and security valuation
Discuss the efficient market hypothesis as it relates to stock valuation
Discuss the functions of the Federal Reserve and the tools that they apply to affect the
economy
Discuss the different aspects of Money Markets, Bond Markets, Mortgage Markets,
Stock Markets, Foreign Exchange Markets, and Derivatives Markets
Evaluate the performance of commercial banks and other financial institutions and how
commercial banks manage different types of risks
Explain the basic features of financial derivatives and how financial institutions apply
them for risk management
Discuss how currency values are determined in the short run and in the long run
FINANCIAL INSTITUTIONS and MARKETS (FIN 340.101)
DR. PAWAN MADHOGARHIA – FALL 2017
Discuss how financial regulations affect the operations of financial institutions particularly
commercial banks
Managing risk off the balance sheet with derivative securities and securitization
Core Learning Outcomes:
1. Analyze the role of financial institutions; discuss the types of financial markets, and risks
faced by financial institutions and how they manage those risks
2. Evaluate Federal Reserve Bank’s primary functions, and monetary policy tools that they
apply to affect the economy
3. Evaluate how the Federal Reserve affects the money supply, the level of interest rates,
the rate of inflation, and the level of economic activity
4. Discuss the term structure of interest rates. Evaluate how interest rates are determined,
effect of inflation rates on the interest rates, and evaluate the relationship between
interest rates affect security valuation
5. Analyze how interest rate changes affect changes in bond prices. Discuss how interest
rate risk can be measured and how interest rate risk can be managed by financial
institutions and investors. Discuss the factors that could affect a security’s yield
6. Analyze the characteristics of money market instruments
7. Evaluate the different instruments traded in different capital markets. Discuss
securitization of debt
8. Analyze the role of different financial institutions: commercial banks, insurance
companies, mutual funds and hedge funds, and pension funds
9. Analyze the role of mortgages, mortgage-backed securities and the role of mortgage
insurers
10. Discuss the characteristics of different financial markets – debt security markets, stock
markets, derivatives markets, and foreign exchange markets
Class Assessment (what/how): There will be three mid-term exams and one comprehensive
final exam. The exams will consist of multiple choices, true/false short answers type questions,
and/or problems. All exams will be closed book and closed notes. Please note that no make-up
exam will be administered unless the student presents a legitimate (college approved) reason
prior to the scheduled exam date. If you miss an exam and you do not have a documented
excuse, you must take the final exam and the score for the final exam may be counted towards
the missed exam. In such circumstances, please discuss possibilities to make-up the missed
assignment/exams with your instructor. Exam dates are available in the schedule and are
subject to change as the class progresses.
Late Submission of Course Materials: Late submission of assignments is allowed. However,
there would be a 1% per day and 7% per week penalty for late submissions. You are strongly
encouraged to submit your assignments on time to keep pace with the course.
Grading: Grades will be available on the course page on Moodle. The following represents the
tentative distribution of values applied to course requirements:
FINANCIAL INSTITUTIONS and MARKETS (FIN 340.101)
DR. PAWAN MADHOGARHIA – FALL 2017
Exams 50% of grade
Project 20% of grade
Probanker Simulation 10% of grade
Quizzes/Assignments 10% of grade
BMC Certification 10% of grade
Grading Scale:
90-100 4.0 (A)
85-89 3.5 (B+)
80-84 3.0 (B)
75-79 2.5 (C+)
70-74 2.0 (C)
60-69 1.0 (D)
<60 0 (F)
Grading Policy:
4 (Excellent): This grade denotes accomplishment that is truly distinctive and decidedly
outstanding. It represents a high degree of attainment and is a grade that demands evidence of
originality, independent work, an open and discriminating mind, and completeness and accuracy
of knowledge, as well as an effective use of the knowledge.
3.5 (Very Good): This grade denotes mastery of the subject matter. It represents very good
achievement in many aspects of the work, such as initiative, serious and determined industry,
the ability to organize work, and the ability to comprehend and retain subject matter and to apply
it to new problems and contexts.
3 (Good): This grade denotes considerable understanding of the subject matter. It represents a
strong grasp and clear understanding of the subject matter and the ability to comprehend and
retain course content.
2.5 (Above Average): This grade denotes above average understanding of the subject matter. It
represents a good grasp of the subject matter and the ability to comprehend and retain course
content.
2 (Average): This grade denotes average understanding of the subject matter. It represents the
grade that may be expected of a student of normal ability who gives the work a reasonable
amount of time and effort.
1 (Below Average): This grade denotes below average understanding of the subject matter. It
represents work that falls below the acceptable standard.
0 (Failure): This grade denotes inadequate understanding of the subject matter. It signifies an
absence of meaningful engagement with the subject matter and that the student is not capable
of doing or understanding the work or has made little or no effort to do so.
I (Incomplete): The student may request permission from the instructor to receive an incomplete
prior to the final examination and must present extraordinary reasons for the petition. The
Instructor should indicate on the Attendance/Final Grade Record the required work the student
must do to complete the course. Any grades of “I” not removed within two calendar months after
the end of the semester will automatically be changed to “0” in the Records Office. Grades of
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