FINANCE 6320

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BA 4345.001 COURSE SYLLABUS

School of Management
The University of Texas at Dallas

Course: Money and Capital Markets - BA 4345.001. 10379

Instructor: Dr. Peter Lewin SOM 3.223

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Semester: Fall 2007: TR 10 a.m. – 11-15 a.m. SOM2.106

Dates: August 16 –November 29, 2007

|Course Information| Student Assessment| Course Communications |Course Outline |Scholastic Dishonesty|

Course Information

Catalog Description

Financial behavior in relation to production and consumption decisions. Banking, financial intermediation, flows of funds, regulation and structure of financial
markets. Selected topics of current interest. Prerequisites: FIN 6301, MECO 6201/6301 and STAT 5311.

Course Introduction

We live in an age of unprecedented prosperity and unprecedented change. Financial markets are an integral part of this. In this course we will learn that
financial markets are crucial for the development of any economy. We will learn what they are and how they function. We will learn about different types of
financial institutions, instruments and policy approaches. And we will learn how money fits in.

Minimal General Learning Outcomes - Course Learning Objectives - Learning Outcomes

Students will develop an understanding of financial markets, financial institutions, and their regulations.
1. Be able to describe the functions of the Federal Reserve System and how the Fed influences interest rates.
2. Be able to give examples of both depository and non-depository financial institutions and the products that they offer.
3. Be able to differentiate between the various financial markets (money, capital, spot, future, derivative, foreign currency, stock, bond) and their financial
instruments.

In addition I would like to achieve the following extensive objectives:

1. Students will be able to explain the functions and benefits of money.

2. Students will be able to discuss the history of money.
3. Students will be able to explain the role and the benefits of financial intermediaries.
4. Students will be able to discuss the nature, determination and role of interest rates.
5. Students will be able to calculate Present Value and understand and discuss how these concepts can also be related to explain the term structure of
interest rates.
6. Students will be able to list the types of financial assets available and discuss briefly the principles which guide their selection as part of a portfolio of
assets.
7. Students will understand and be able to explain the relationship between types of financial contracts and the characteristics of the business
environment, including business size and cultural background.
8. Students will be able to explain how regulation, inflation, and technology influence the development of financial institutions.
9. Students will be able to explain the differences between futures, options and swaps.
10. Students will explain the functioning and history of foreign exchange markets, the significance of the balance of payments and the integration of
currency areas.
11. Students will be able to explain the history and structure of the Fed and compare it to other central banks. Students will be able to discuss the tools of
monetary policy.
12. Students will be able to explain and evaluate monetary policy. Students will be able to discuss, compare and contrast the Classical economists,
Keynesian economics, Monetarism and other approaches.

Instructor Information

Brief biography:

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I was born and grew up in Johannesburg, South Africa. I received a BA (honors) degree in Economics and History from the University of the Witwatersrand in
Johannesburg in 1969. In September 1972, after teaching at the business school at that University, I left to study at the University of Chicago. I received a Ph.D. in
Economics from the University of Chicago in 1979. I was fortunate to have as teachers at least four Nobel prize winners. In January 1979 I moved with my family
to Dallas, where we have lived ever since. After seven years as an academic, I tried my hand in an entrepreneurial venture and joined a friend in a startup
business called Soft Warehouse. Today it is called CompUSA. I was one of its founding shareholders. It was a difficult but very educational experience. In 1992 I
decided to return to academics and have been with the UTD School of Management since 1997. I love my job. I have a passion for teaching and for economics.

My wife and I were married in December 1969. We have four children and two grandchildren.

To see more about my professional and personal life visit my website at http://www.utdallas.edu/~plewin/

Contact information:

Email: plewin@utdallas.edu
Phone: 972-883-2729
Office SM 3.223
Instructor's Web Site: http://www.utdallas.edu/~plewin/
Online Course Site: http://webct.utdallas.edu/ (Note requires login, see instructions below)

You can contact me anytime by phone or email, or by appointment in my office.

Course Materials

The text I have required for this course is the following:

Principles of Money, Banking & Financial Markets by Lawrence S. Ritter, William L. Silber and Gregory F. Udell, 11thedition, Addison, Wesley, Longman,
2005.
This is a fairly accessible text and, though it has more detail than I will cover in the lessons, the approach is similar to mine. From time to time I will
suggest some optional supplementary reading. In addition to reading the recommended chapters plus supplementary material you would do best to
listen carefully to the lessons.

The following paper is also required reading. Click on it to follow the link. You will need Adobe Acrobat to read it; it can be downloaded from their site for free.

Inflation, Common Fallacies and Real Issues, Graduate School of Business Administration, University of the Witwatersrand and Fact and Opinion Papers,
No. 3, (Second Edition, 1978).

Textbooks and some other bookstore materials can be ordered online through MBS Direct Virtual Bookstore or Off-Campus Books online ordering site. They are
also available in stock at UTD Bookstore and Off-Campus Books.

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Student Assessment: Grading/Evaluation

There will be two online tests, two midterms (25%) and a semi-comprehensive final (50%) on campus. The tests will be composed of multiple choice questions.

Test 1 (covers lessons 1-5) 25% September 21 – 23

Test 2 (covers lesson 6-9) 25% October 19 - 21
Test 3 (final, comprehensive) 50% November 29 - on campus normal class time

Online Testing

You can access tests by clicking the "Tests and Self-Tests" icon and then clicking the available test title links. Each test is timed and can only be accessed once
within the scheduled time window. Please read the on-screen instructions carefully before you click the "Begin Quiz" button. You may review your test results by
click the “View Score” button after the test results are released.

There is a self test for each lesson. They are non-credit tests for self assessments and help you prepare for the real tests.

Grades

You can check your grades by accessing the “My Grades” icon on Student Tools page after the grade for each item listed is released.

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Course Communications
WebCT course has built-in communication tools which will be used for course interactions and communications. I prefer you communicate with me using my
regular email plewin@utdallas.edu. My campus phone is 972-883-2729. You can leave me a message, but since I check it irregularly email is better.

Interaction with Instructor: I will communicate with the class using WebCT announcements, so please check them regularly. On the Discussion board. Students
may send personal concerns or questions to each other or to me. Via email I will reply to student emails or Discussion board messages within 3 working days
under normal circumstances.

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Course Outline

Tuesday Lesson Thursday Lesson

16-Aug 1
21-Aug 1 23-Aug 2
28-Aug 2 30-Aug 3
4-Sep 3 6-Sep 4
11-Sep 4 13-Sep NO CLASS
18-Sep 5 20-Sep 5
Test 1 online (Available 09/21 - 09/23)* 6
25-Sep 6 27-Sep 6
2-Oct 7 4-Oct 7
9-Oct 8 11-Oct 8
16-Oct 9 18-Oct 9
Test 2 online (Available 10/19 - 10/21)*
23-Oct 10 25-Oct 10
30-Oct 11 1-Nov 11
6-Nov 11 8-Nov 12
13-Nov 12 15-Nov 12
20-Nov 12 22-Nov Review
27-Nov 29-Nov Final Test on campus, normal class time

*online testing
You can access tests by clicking the "Assessments" link on the course menu and then clicking the available test title links. Each test is timed and can only be
accessed once within the scheduled time window. Please read the on-screen instructions carefully before you start the test. You may review your test results
after the test results

Reading Guide

Lessons by Topic and chapters

Lesson Topic Chapters

Lesson 1 The Nature, Origins and Development of Money as a Chapters 1,2
Social Institution. – Part One
In this lesson we discuss, in broadly philosophical terms the
functions and benefits of money.

Lesson 2 The Nature, Origins and Development of Money as a Chapters 1, 2

Social Institution. – Part Two
In this lesson we discuss how money came about.

Lesson 3 Financial Intermediation – Institutions and Instruments Chapters 3, 4

In this lesson we gain an understanding of the role and the
benefits of financial intermediaries. We look at what kinds
there are and what assets they trade.

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Lesson 4 Interest Rates – what they are and how the are Chapters 3, 4
determined
In this lesson we gain an understanding of the nature,
determination and role of interest rates.

Lesson 5 The Structure of Interest Rates and the Determination of Chapters 4, 5

Present Value
In this lesson we learn about the universal arithmetic of
Present Value and see how these concepts can also be
related to explain the term structure of interest rates.

Midterm 1: Available 09/21 - 09/23

Lesson 6 Choosing among Financial Assets: the Principles of Chapters 6, 7, 8, 11, 12, 13
Portfolio Selection
In this lesson we will review the types of financial assets
available and discuss briefly the principles which guide
their selection as part of a portfolio of assets.

Lesson7 Understanding Financial Contracts: In this lesson we will Chapters 14, 16

learn about the relationship between types of financial
contracts and the characteristics of the business
environment, including business size and cultural
background (ex. USA v. Japan).

Lesson 8 The Regulation and Evolution of Financial Intermediaries Chapters 12, 15

In this lesson we will learn how, regulation, inflation, and
technology has influenced the development of financial
institutions.

Lesson 9 Understanding Derivatives Chapter 9

In this lesson we will learn about futures, options and
swaps.

Midterm 2: Available 10/19 - 10/21

Chapter 10
Lesson 10 Understanding Foreign Exchange
In this lesson we will learn about the functioning and
history of foreign exchange markets, the significance of the
balance of payments and the integration of currency areas
(e.g. the Euro)

Lesson 11 The Federal Reserve System Chapters 17 - 21

In this lesson we will learn about the history and structure
of the Fed. and how it compares to other central banks.
We will discuss the tools of monetary policy.

Lesson 12 Monetary Theory and Policy Chapters 22 -23 inflation paper*

In this lesson we will develop a framework for
understanding and evaluating monetary policy. We will
place this in the context of the history of economic
thought. We will learn about the Classical economists,
Keynesian economics, Monetarism and other approaches.

Final Exam

*Available at: http://www.utdallas.edu/~plewin/F&Opaper.pdf

Note: Not all of the material in the chapters indicated is relevant. You should read intelligently by matching the topics with
what is covered in the course lectures.

Scholastic Dishonesty
The university has policies and discipline procedures regarding scholastic dishonesty. Detailed information is available on the Scholastic Dishonesty web page. All
students are expected to maintain a high level of responsibility with respect to academic honesty. Students who violate university rules on scholastic dishonesty
are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the university. Since such dishonesty harms the
individual, all students and the integrity of the university, policies on scholastic dishonesty will be strictly enforced.

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University Policies

Student Conduct & Discipline

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The University of Texas System and The University of Texas at Dallas have rules and regulations for the orderly and efficient conduct of their business. It is the
responsibility of each student and each student organization to be knowledgeable about the rules and regulations which govern student conduct and activities.
General information on student conduct and discipline is contained in the UTD publication, A to Z Guide, which is provided to all registered students each
academic year.

The University of Texas at Dallas administers student discipline within the procedures of recognized and established due process. Procedures are defined and
described in the Rules and Regulations, Board of Regents, The University of Texas System, Part 1, Chapter VI, Section 3, and in Title V, Rules on Student Services
and Activities of the university’s Handbook of Operating Procedures. Copies of these rules and regulations are available to students in the Office of the Dean of
Students, where staff members are available to assist students in interpreting the rules and regulations (SU 1.602, 972/883-6391).

A student at the university neither loses the rights nor escapes the responsibilities of citizenship. He or she is expected to obey federal, state, and local laws as
well as the Regents’ Rules, university regulations, and administrative rules. Students are subject to discipline for violating the standards of conduct whether such
conduct takes place on or off campus, or whether civil or criminal penalties are also imposed for such conduct.

Academic Integrity

The faculty expects from its students a high level of responsibility and academic honesty. Because the value of an academic degree depends upon the absolute
integrity of the work done by the student for that degree, it is imperative that a student demonstrate a high standard of individual honor in his or her scholastic
work.

Scholastic dishonesty includes, but is not limited to, statements, acts or omissions related to applications for enrollment or the award of a degree, and/or the
submission as one’s own work or material that is not one’s own. As a general rule, scholastic dishonesty involves one of the following acts: cheating, plagiarism,
collusion and/or falsifying academic records. Students suspected of academic dishonesty are subject to disciplinary proceedings.

Plagiarism, especially from the web, from portions of papers for other classes, and from any other source is unacceptable and will be dealt with under the
university’s policy on plagiarism (see general catalog for details). This course will use the resources of turnitin.com, which searches the web for possible
plagiarism and is over 90% effective.

Email Use
The University of Texas at Dallas recognizes the value and efficiency of communication between faculty/staff and students through electronic mail. At the same
time, email raises some issues concerning security and the identity of each individual in an email exchange. The university encourages all official student email
correspondence be sent only to a student’s U.T. Dallas email address and that faculty and staff consider email from students official only if it originates from a
UTD student account. This allows the university to maintain a high degree of confidence in the identity of all individual corresponding and the security of the
transmitted information. UTD furnishes each student with a free email account that is to be used in all communication with university personnel. The
Department of Information Resources at U.T. Dallas provides a method for students to have their U.T. Dallas mail forwarded to other accounts.
Withdrawal from Class

The administration of this institution has set deadlines for withdrawal of any college-level courses. These dates and times are published in that semester's course
catalog. Administration procedures must be followed. It is the student's responsibility to handle withdrawal requirements from any class. In other words, I
cannot drop or withdraw any student. You must do the proper paperwork to ensure that you will not receive a final grade of "F" in a course if you choose not to
attend the class once you are enrolled.

Student Grievance Procedures

Procedures for student grievances are found in Title V, Rules on Student Services and Activities, of the university’s Handbook of Operating Procedures.

In attempting to resolve any student grievance regarding grades, evaluations, or other fulfillments of academic responsibility, it is the obligation of the student
first to make a serious effort to resolve the matter with the instructor, supervisor, administrator, or committee with whom the grievance originates (hereafter
called “the respondent”). Individual faculty members retain primary responsibility for assigning grades and evaluations. If the matter cannot be resolved at that
level, the grievance must be submitted in writing to the respondent with a copy of the respondent’s School Dean. If the matter is not resolved by the written
response provided by the respondent, the student may submit a written appeal to the School Dean. If the grievance is not resolved by the School Dean’s
decision, the student may make a written appeal to the Dean of Graduate or Undergraduate Education, and the deal will appoint and convene an Academic
Appeals Panel. The decision of the Academic Appeals Panel is final. The results of the academic appeals process will be distributed to all involved parties.

Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in
interpreting the rules and regulations.

Incomplete Grade Policy

As per university policy, incomplete grades will be granted only for work unavoidably missed at the semester’s end and only if 70% of the course work has been
completed. An incomplete grade must be resolved within eight (8) weeks from the first day of the subsequent long semester. If the required work to complete
the course and to remove the incomplete grade is not submitted by the specified deadline, the incomplete grade is changed automatically to a grade of F.

Disability Services

The goal of Disability Services is to provide students with disabilities educational opportunities equal to those of their non-disabled peers. Disability Services is
located in room 1.610 in the Student Union. Office hours are Monday and Thursday, 8:30 a.m. to 6:30 p.m.; Tuesday and Wednesday, 8:30 a.m. to 7:30 p.m.;
and Friday, 8:30 a.m. to 5:30 p.m.

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The contact information for the Office of Disability Services is:

The University of Texas at Dallas, SU 22
PO Box 830688
Richardson, Texas 75083-0688
(972) 883-2098 (voice or TTY)

Essentially, the law requires that colleges and universities make those reasonable adjustments necessary to eliminate discrimination on the basis of disability.
For example, it may be necessary to remove classroom prohibitions against tape recorders or animals (in the case of dog guides) for students who are blind.
Occasionally an assignment requirement may be substituted (for example, a research paper versus an oral presentation for a student who is hearing impaired).
Classes enrolled students with mobility impairments may have to be rescheduled in accessible facilities. The college or university may need to provide special
services such as registration, note-taking, or mobility assistance.

It is the student’s responsibility to notify his or her professors of the need for such an accommodation. Disability Services provides students with letters to
present to faculty members to verify that the student has a disability and needs accommodations. Individuals requiring special accommodation should contact
the professor after class or during office hours.

Religious Holy Days

The University of Texas at Dallas will excuse a student from class or other required activities for the travel to and observance of a religious holy day for a religion
whose places of worship are exempt from property tax under Section 11.20, Tax Code, Texas Code Annotated.
The student is encouraged to notify the instructor or activity sponsor as soon as possible regarding the absence, preferably in advance of the assignment. The
student, so excused, will be allowed to take the exam or complete the assignment within a reasonable time after the absence: a period equal to the length of the
absence, up to a maximum of one week. A student who notifies the instructor and completes any missed exam or assignment may not be penalized for the
absence. A student who fails to complete the exam or assignment within the prescribed period may receive a failing grade for that exam or assignment.
If a student or an instructor disagrees about the nature of the absence [i.e., for the purpose of observing a religious holy day] or if there is similar disagreement
about whether the student has been given a reasonable time to complete any missed assignments or examinations, either the student or the instructor may
request a ruling from the chief executive officer of the institution, or his or her designee. The chief executive officer or designee must take into account the
legislative intent of TEC 51.911(b), and the student and instructor will abide by the decision of the chief executive officer or designee.
Off-Campus Instruction and Course Activities
Off-campus, out-of-state, and foreign instruction and activities are subject to state law and University policies and procedures regarding travel and risk-related
activities. Information regarding these rules and regulations may be found at the website address given below. Additional information is available from the
office of the school dean. (http://www.utdallas.edu/BusinessAffairs/Travel_Risk_Activities.htm)

These descriptions and timelines are subject to change at the discretion of the Professor.

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©2007 BA4345 Professor Peter Lewin, plewin@utdallas.edu

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