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FIN 3522 Markets and institutions

FIN 3522 Markets and institutions

Course code: 
FIN 3522
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Malgorzata Ryduchowska
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2021 Spring
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

Financial markets are instrumental to the workings of the economy. However, these markets do not exist in a vacuum but evolve from the interactions of market participants within the boundaries of market institutions. Financial markets have grown in importance and globalized over time linking investors and institutions across borders. Digitalization and other rapid innovations in technology increase the complexity of the financial environment. This, together with the recent financial crisis, has brought into light the necessity to understand how financial markets actually work.

The course focuses on the mechanisms by which securities are traded in modern financial markets and the implications of trading mechanisms for the efficiency and liquidity of markets. It treats theoretical and empirical work on trading mechanisms and market outcomes and shows how it helps explaining actual events. The course closes with the discussion of some topical issues for financial markets (including digitalization) that transformed the way its participants interact.

Learning outcomes - Knowledge

Upon completion of the course students will:

  • understand market structures, how and why they changed over time, their impact on price efficiency and liquidity,
  • understand the connections between various market participants, their roles and incentives,
  • understand the general rules of financial markets and why they may sometimes fail.
Learning outcomes - Skills

Upon completions of the course students will acquire analytical skills that would prepare them to work involve asset management, trading, financial analysis or for graduate work in this area. Students will be able to:

  • evaluate assets based on risk and return,
  • employ theoretical concepts to analyse actual events taking place on financial markets,
  • collect and analyse necessary financial data, e.g. from Bloomberg.
General Competence

The course will bridge the theory and practice. It aims to introduce a student to actual financial markets and teach how to employ theoretical concepts in a practical setting. This will enable the student to operate in actual financial markets, e.g. as an asset manager, analyst, trader or consultant.

Course content
  1. Fundamental principles of finance. Efficient market hypothesis and no arbitrage.
  2. Risk and return. CAPM and multifactor models.
  3. Why do we have financial markets? Consumption smoothing and risk-sharing.
  4. Overview of the financial system. Different participants and their roles. Globalization of the financial system.
  5. Different markets and instruments. Primary and secondary markets (IPOs, SEOs, rights issues).
  6. Secondary markets and liquidity.
  7. Interest rates.
  8. Delegated portfolio management. Active vs. passive investment.
  9. Financial crises.
  10. Topical issues and controversies in financial markets (e.g. digitalization, high-frequency trading, electronic trading platforms).
Teaching and learning activities

The course will include a combination of lectures and discussions of actual events.

Specific Information regarding any aspect of student evaluation will be provided in class. It is the student’s responsibility to obtain this information. Please note that whilst attendance is not compulsory, it is the student’s responsibility to obtain any information provided in class that is not included on the course homepage/itslearning or in the textbook. Homepages and/or itslearning are not designed as an alternative for who choose not to attend class.

Spreadsheets (Excel or Google Sheets) will be used for certain practical applications and examples. It is recommended that students become familiar with their use. It will be explained how to use the Bloomberg terminal to collect and analyse financial data.

Some discussions of current issues will be based on analytical articles from financial newspapers and magazines (e.g. Financial Times, The Economist). Students are encouraged to track financial news.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut-off points concerning the letter grades when the course starts.

At re-sit all exam components must, as a main rule, be retaken during the next scheduled course.

The final grade in the course will be based on the following components and weightings:

  • Compulsory home assignment. (20%)
  • Compulsory presentation to be discussed in class. (10%)
  • 3 hours written exam. (70%)

Specific information regarding student evaluation beyond the information given in the course description will be provided in class.

Software tools
Software defined under the section "Teaching and learning activities".
Additional information

Honour Code

Academic honesty and trust are important to all of us as individuals and represent values that are encouraged and promoted by the honour code system. This is the most significant university tradition. Students are responsible for familiarizing themselves with the ideals of the honour code system, to which the faculty are also deeply committed. The expected behaviour and honour code are outlined here.

Any violation of the honour code will be resolved in accordance with BI’s procedures for cheating. These issues are a serious matter to everyone associated with the programs at BI and are at the heart of the honour code and academic integrity. If you have any questions about your responsibilities under the honour code, please ask.

Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

BØK 3423 Finance or equivalent.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN35221
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
20No 2 Week(s)Group/Individual (3 - 6) Bloomberg
Exam category:
Activity
Form of assessment:
Presentation
Exam code:
FIN35221
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No 2 Week(s)Group/Individual (3 - 6)Presentation
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN35221
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
70Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:20
Invigilation:No
Grouping (size):Group/Individual (3-6)
Support materials:
Duration: 2 Week(s)
Comment: Bloomberg
Exam code:FIN35221
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Activity
Form of assessment:Presentation
Weight:10
Invigilation:No
Grouping (size):Group/Individual (3-6)
Support materials:
Duration: 2 Week(s)
Comment:Presentation
Exam code: FIN35221
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:70
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:
Exam code:FIN35221
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100
Student workload
ActivityDurationComment
Teaching on Campus
36 Hour(s)
Seminar groups
6 Hour(s)
Bloomberg sessions
Prepare for teaching
83 Hour(s)
Group work / Assignments
30 Hour(s)
Examination
45 Hour(s)
Exam incl. preparations
Sum workload: 
200

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.