Course Outline

Course Outline 2019-2020 Fall Semester

EASTERN MEDITERRANEAN UNIVERSITY
FACULTY OF BUSINESS AND ECONOMICS
DEPARTMENT OF BANKING AND FINANCE

2019-2020 FALL SEMESTER

COURSE CODE

FINA 302

COURSE LEVEL

6th semester 3rd year - Undergraduate

COURSE TITLE

Money and Banking

COURSE TYPE

Area Core

LECTURER(S)

Assoc. Prof. Dr. Hasan Altiok - Prof. Dr. Eralp Bektas

CREDIT VALUE

3 Credit Hrs.

ECTS VALUE

6

PREREQUISITES

None

COREQUISITES

None

DURATION OF COURSE

One Semester

WEB LINK

http://bank.emu.edu.tr

http://fbemoodle.emu.edu.tr

CATALOGUE DESCRIPTION This course presents the students underlying economic explanations for why the financial system is organized as it is and to teach them functions of the financial system in the economy. It focuses on the role of interest rates, financial markets and institutions.

 

AIMS & OBJECTIVES The aim of this course is to teach students the evolution of monetary economics and the role of the money in the economic transactions. It also tries to explain interest rate determination and the relationship between interest rates and term structure. Understanding the role of financial institutions in asymmetric information, transaction cost, adverse selection, moral hazard and market efficiency are also among the objectives of the course.

 

GENERAL LEARNING OUTCOMES (COMPETENCES)

On successful completion of this course, all students will have developed knowledge and understanding of:

-       The role of financial system in the economy

-       Interest rate determination

-       Financial markets

-       Financial Institutions

On successful completion of this course, all students will have developed their skills in:

-       Understanding the risk sharing, information and liquidity services of the financial system

-       Analysing interest rate movements

-       Understanding the role of financial institutions and markets in economy

On successful completion of this course, all students will have developed their appreciation of and respect for values and attitudes regarding the issues of:

-       Need for the efficient financial system

-       Role of financial institutions and markets

-       Money and Interest rates

 

GRADING CRITERIA

85 – 100 (A); 80 – 84 (A-); 75 – 79 (B+); 70 – 74 (B); 66 – 69 (B-); 63 – 65 (C+); 60 – 62 (C); 57 – 59 (C-); 54 – 56 (D+); 50 – 53 (D); 45 – 49 (D- /FAIL); 0  - 44 (F/FAIL)

 

RELATIONSHIP WITH OTHER COURSES

Since the course involve with monetary issues it is very closely related to macroeconomics.

 

LEARNING / TEACHING METHOD

Lectures, assignments and quizzes

 

ASSIGNMENTS

Assignments are given to develop analytical thinking of students and are designed to develop practical knowledge in concepts of Money, Banking and Financial Markets. They are tools of learning more than tools of assessment. 

GUIDELINES FOR ASSIGNMENTS:     

Homework should be clearly written with a pencil or pen (red reserved for correction) on an A-4 white paper, with a cover page and in a plastic folder file. They should be in a form that would be acceptable to your future employer.  Sloppy work will not be accepted.

 

Late assignments will not be accepted for initial credit unless you have an authorized written excuse.  Late assignments within acceptable dates will be graded with a 20% discount. No homework can be accepted after the return of corrected homework.

 

METHOD OF ASSESSMENT

          Quizzes/Assignments                               20%

          Midterm Exam                                           35%

          Final Exam                                                  45%

 

ATTENDANCE

Attendance is compulsory by school regulations. Students are strongly advised not to miss lecture hours since success is closely related with attendance. Absence over 20% will be penalized with an NG.

 

MAIN TEXTBOOK

Schoenholtz, Cecchetti. Money, Banking, and Financial Markets, Third Edition, Mc Graw Hill.

 

ADDITIONAL TEXTBOOK/S-

Hubbard, Glenn R., Money, the Financial System, and the Economy, Sixth Edition, Addison Wesley, 2008.

INDICATIVE BASIC READING LIST

None

EXTENDED READING LIST

None

SEMESTER OFFERRED

2015-2016 Spring Semester

CONTENT & SCHEDULE

Please check your own course time table

 

ACADEMIC HONESTY

Academic honesty is the cornerstone of the development and acquisition of knowledge. Academic honesty demands that the contribution of others be acknowledged. To do less is to cheat. To pass off contributions and ideas of another as one’s own is to deprive oneself of the opportunity and challenge to learn and to participate in the scholarly process of acquisition and development of knowledge. Not only will the cheater or intellectually dishonest individual be ultimately his/her own victim, but also the general quality of scholarly activity will be seriously undermined. It is for these reasons that Eastern Mediterranean University insists on intellectual honesty in scholarship. The control of intellectual dishonesty begins with the individual’s recognition of standards of honesty expected generally and compliance with those expectations. Plagiarism, cheating and other misconduct are not acceptable. Individual work must reflect an individual’s own effort. Plagiarism is an offense and will be dealt with according to University regulations. A single offence of cheating, plagiarism or other academic misconduct on assignments, term projects or examinations etc. may lead to disciplinary probation or a student’s suspension or expulsion from the University.

MAKE-UP EXAMS

Students, who have valid excuses, will be allowed to take make-up examinations for midterm and final exams. No make-up exams for quizzes.

 

 

 

 

THE LECTURE TOPICS WITHIN THE SEMESTER ARE AS

IN THE FOLLOWING SCHEDULE

 

DATE

SUBJECT & CHAPTER

TOPICS

23-27, Sep,2019

Chp.1: An Introduction to Money and the Financial System 

Financial system and the economy; Financial markets; Financial institutions; Economic analysis as a tool.

30 Sep,2019

Chp.2: Money and the

Payment System

Quiz 1

Money vs. barter; what can serve as money; the payment system; Measuring the money supply.

7-11 Oct,2019

Chp.3: Financial Instruments, Financial Markets, and Financial Institutions 

The purpose of the financial system; Risk sharing; Liquidity; Information; Debt and equity; Savers and borrowers.

14-18 Oct,2019

Chp.4: Future Value, Present Value, and Interest Rates

Comparing debt instruments; Present value; Yield to maturity; Bond yields and prices.

21-25 Oct,2019

Chp.4: Future Value, Present Value, and Interest Rates

Comparing debt instruments; Present value; Yield to maturity; Bond yields and prices.

28 Oct,01 Nov,2019

Chp.5: Understanding Risk

Quiz 2

Definition of Risk, measuring risk, sources of risk; idiosyncratic and systematic risk. Reducing risk through diversification.

04-08 Nov,2019

Chp.6: Bonds, Bond Prices, and the Determination of Interest Rates

Supply and demand in the bond market and loanable funds.

11-23 Nov,2019

  MIDTERM EXAMINATIONS

25-29 Nov,2019

Chp.6: Bonds, Bond Prices, and the Determination of Interest Rates

Explaining changes in equilibrium interest rates; International capital market and the interest rates.

02-06 Dec, 2019

Chp.7: Risk and Term Structure of Interest Rates   

Default risk; liquidity; Information costs; Taxation; Segmented market hypothesis; Expectations theory; Preferred habitat approach.

09-13 Dec, 2019

Chp.7: Risk and Term Structure of Interest Rates   

Quiz 3

Default risk; liquidity; Information costs; Taxation; Segmented market hypothesis; Expectations theory; Preferred habitat approach.

16-20 Dec, 2019

Chp.11:The Economics of Financial Intermediation   

The role of financial intermediaries, solving the adverse selection problem. Moral Hazard: Problem and Solutions. Financial intermediaries and information costs

23-27 Dec, 2019

Chp.14: Regulating the Financial System

The sources and consequences of runs, panics, and crises. Regulation and supervision of the financial system.

 

30-31 Dec, 2019

 

 

Review and end of classes

02-17 Jan,2020

 FINAL EXAMINATIONS

Last modified: Tuesday, 15 October 2019, 10:43 AM