AFC2170

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: AFC1021/AFC1022 and AFC1031/AFC1032 (pass division I) or ECC1000 and ECC1010 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 Mid-semester test (1 hour): 20%
* Examination (3 hours): 80%

Prescribed texts

McGrath M and Viney C Financial institutions, instruments and markets McGraw-Hill, 2nd edn