BA 4345 Money and Capital Markets Spring 2005

Instructor: Mary Chaffin MW 2-3:15 p.m.

chaf@utdallas.edu
Office: SM2.208
Office Hours: MW 3:30-5:00 p.m. and by appointment
Web page: www.utdallas.edu/~chaf

Required Text: Principles of Money, Banking, & Financial Markets, 11th Ed., by Ritter, Silber, Udell
Recommended: Financial Calculator, Wall Street Journal(Available in the library if you do not subscribe)

Course Description:
This course focuses on money, financial markets and institutions. The objectives are: to provide a
perspective on how financial markets and institutions fit in to the economy; to help you understand the
importance of money, credit, and interest rates; to describe the function of various financial markets -
money markets, capital markets, foreign exchange markets, derivatives markets, and their numerous
financial instruments; to provide a perspective on the business of financial institutions such as
commercial/investment banks, investment funds and their regulation; to help you understand the Federal
Reserve System and how it impacts monetary policy.

Major Topics:
Overview of Financial Markets and Institutions
Determinants of Interest Rates
The Securities Markets – Money, Bond, Mortgage, Stock, Foreign Exchange and Derivative Markets
Depository Institutions – Commercial Banks and Thrifts
Non-depository Financial Institutions
The Federal Reserve System, Monetary Policy and Interest Rates

Course requirements and Prerequisites:

You should have successfully completed BA 3341 Business Finance. You are expected to have proficiency
in time value of money concepts and calculations, spreadsheet modeling and Internet skills.

Course Materials:
Student lecture notes are available on Web CT. Students are responsible for assignments and assigned
reading materials. Come to class prepared to discuss. Answers to the end of chapter questions are
available on Web CT.

Course Grading:
You must take exams on the dates and times given. Students missing an exam will be required to take a
comprehensive final exam. Each exam will last approximately one hour and will be problems and short
answer. The final exam will last two hours and will be multiple-choice.
• A student that takes all four exams has the option to take the final exam but is not required to
take the final.
• For students that take all four exams and do not take the final exam, each exam will count
25%.
• For students that take all four exams and choose to take the final exam, the top four grades
will count 25%.
• For students that are required to take the final exam, each exam including the final will count
25% of the student’s grade.
Grades will be based on the following scale:
97+ = A+, 93-96.99 A, 90-92.99 A-. The breakdown is the same for other grades.
Market Tracking Assignment and Extra Credit:
A market tracking assignment is available on Web CT. Questions from this assignment will be included on
each exam. You may (optional) turn in a copy of this assignment for extra credit at the end of the semester.
If your submission is complete and of high quality, I will add up to 3 points to your final average. A hard
copy of the assignment is due between April 18 and April 24 at 5:00 p.m. The report should include a one
page analysis of the data. NO ASSIGNMENT WILL BE ACCEPTED LATE. You should keep the
data in a spreadsheet and be prepared to answer questions about it in class. I will randomly call on students
during class. Being in attendance and prepared can add up to one point on your final course grade.

Text Web Page:

If you purchased a new copy of the text book, additional resources are available online at
www.myeconlab.com . The course ID is: chaffin72401.

Practice Problems:
Practice problem sets are available on Web CT. These should be done prior to each of the exams. We will
go over these in class upon request. They are not to be turned in.

Readings:
Periodically articles from the Wall Street Journal or other publications will be posted on Web CT. You are
responsible for reading the articles. Test questions may come from the articles.

Class Schedule:
January 9 Ch 1, 2 Introduction
January 11 Ch 3 Financial Instruments, Markets, Institutions
January 18 Ch 4 Interest Rate Measurement
January 23, 25 Ch 5 Determinants of Interest Rates
January 30 Exam 1 (2, 3, 4, 5)
February 1 Ch 6 Security Valuation
February 6, 8 Ch 8 Money and Capital Markets
February 13, 15 Ch 9 Derivative Markets
February 20, 22 Ch 10 Foreign Exchange Markets
February 27 Exam 2 (6, 8, 9, 10)
March 1 Ch 11 Financial Intermediation
March 13 Ch 12 Depository Financial Institutions
March 15, 20 Ch 13 Non-depository Financial Institutions
March 22 Ch 14 Financial Contracts
March 27, 29 Ch 15 Regulation
April 3 Exam 3 (11, 12, 13, 14, 15)
April 5 Ch. 17 The Federal Reserve System
April 10, 12 Ch 18 The Central Bank and the Money Supply
April 17 Ch 19 The Instruments of Central Banking
April 19 Exam 4 (17, 18, 19)
April 24 Ch 29 Economic Indicators
May 1 Final Exam (Optional if you have taken all other exams) – Bring Scantron

Policy on Cheating: Students are expected to be above reproach in all scholastic activities. Students who
engage in scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in
the course and dismissal from the university. "Scholastic dishonesty includes but is not limited to cheating,
plagiarism, collusion, the submission for credit of any work or materials that are attributable in whole or in
part to another person, taking an examination for another person, any act designed to give unfair advantage
to a student or the attempt to commit such acts." Regents' Rules and Regulations, Part One, Chapter VI,
Section 3, Subsection 3.2, Subdivision 3.22. Violations of class rules will subject you to discipline from
the Dean of Students. I take scholastic dishonesty very seriously.