Capital markets and financial institutions
Mr Howard Chan
6 points * Two 1-hour lectures and one 1-hour tutorial per week * First semester * Clayton * Prerequisites: AAF1021/2 and AAF1031/2 (pass division I) or ECO1020/1030 or with department approval.
Objectives On completion of this subject students should be able to provide an overview of the Australian financial system; be familiar with the basic types of financial instruments and institutional users; be able to interpret aggregate balance sheets and flow-of-funds accounts; be familiar with the main forms and sources of equity and debt finance; be able to apply financial mathematical techniques to financial instruments; be able to explain and derive the term and risk structure of interest rates; be able to explain the operation of capital and derivatives markets.
Synopsis This subject provides students with an understanding of capital markets, financial instruments and financial institutions. Topics covered include an overview of the Australian financial system, basic types of financial instruments, aggregate balance sheets and flow-of-funds, financial mathematics, equity finance, debt finance, interest rate structures, financial derivatives and innovation.
Assessment Written (1500 words): 20% * Examination (3 hours): 80%
Prescribed texts
Hunt B and Terry C Financial instruments and markets Nelson, 1993