Finance 2227 -- Financial Markets

Dr. David Nawrocki

VILLANOVA UNIVERSITY

Villanova School of Business

Department of Finance

 

Fall 2006 - Finance 230-2227 - Financial Markets

Office: 2020 Bartley next to the Finance Office

Office Hours: TTh 1:00pm-2:30pm, also by appt.

Phone: 610-519-4323

E-mail: David.Nawrocki@villanova.edu

Website: http://www.homepage.villanova.edu/david.nawrocki

Prerequisites: Finance 1113 and Junior Level Standing.  "It is the student’s responsibility to be certain that the prerequisites have been successfully completed. If at any time during the semester it is determined that a student has not completed the prerequisites, the student can be administratively dropped from the course without credit or tuition refund."

Course Objectives: To provide the student with an understanding of the role of financial markets and financial institutions in the domestic economy and in the international financial system.  The course stresses understanding how markets operate within a complex macroeconomic system.   The course stresses general systems theory and ethics as they relate to financial markets.  Memorization of material is strongly discouraged and will result in reduced grades.

Required Textbooks:

1.  Course Pack containing:

Tvede, L., Business Cycles: From John Law to Chaos Theory, 1997.
Boulding, K. Evolutionary Economics, 1980.
Katz and Kahn, Social Psychology of Organizations, 1966, Chapter 2.

2. Bear and Maldonado-Bear (BMB) Free Markets, Finance, Ethics, and Law, pb, 1994.

3. Adam Smith, The Money Game, Paperback, 1966.

 

OUTLINE

Topic

1. Overview of Money and Banking - Lecture Notes and Tvede Chapters 1-5

2. General Systems Theory - Katz and Kahn - Chapter 2

3. National Flow of Funds - Based on Katz and Kahn Chapter 2 and Class Handout

4. Overview of Ethics and Financial Markets - Bear and Maldonado-Bear Chapters 1,2,3

5. Financial Markets - Lecture Notes and Handout

6. Market Theory - Adam Smith, The Money Game, Boulding Chapter 1 and 2

7. Government Regulation - Bear & Maldonado-Bear Chapters 5,6,8

8. Public Policy - Lecture Notes, Boulding Chapters 4,5,6

9. Term Structure of Interest Rates - Lecture Notes

10. Bond Duration and Bond Management

GRADING

30 Points Each - 2 Midterm Essay Exams

40 Points for Final Essay Exam

Method of Instruction:  Lecture, Outside Reading, Class Discussion and Writing Essays.

Make-ups

There will be NO makeup exams. Missed exams will be made up by writing a term paper which may affect your final grade depending on the average of the exams that you do complete.  A valid excuse will be required for any absences from an exam.  The final exam is given only during the assigned final exam period. DO NOT ask to take the exam early.  There is no makeup term paper for the final exam.

Other Issues

I will not tolerate any disruption of class by beeping computers or ringing cell phones.  Surfing the internet is to be on your own time not classroom time.

Honesty Statement

Honesty during exams is imperative. The instructor reserves the right to make ANY   adjustments necessary in order to maintain the fairness of the exams and the course grading. Graduating seniors should note that graduation and diplomas may be withheld because of dishonesty in this course. Accounting seniors should note that this course may be used as a required course in order to sit for the C.P.A. exam in New Jersey and New York. A grade of C or above may be required in order to sit for this exam.

The Code of Academic Integrity of Villanova University addresses cheating, fabrication of submitted work, plagiarism, handing in work completed for another course without the instructor’s approval, and other forms of dishonesty. For the first offense, a student who violates the Code of Villanova University will receive 0 points for the assignment. The violation will be reported by the instructor to the Dean’s office and recorded in the student’s file. In addition, the student will be expected to complete an education program. For the second offense, the student will be dismissed from the University and the reason noted on the student’s official transcript.

Disability Statement

It is the policy of Villanova to make reasonable academic accommodations for qualified individuals with disabilities. If you are a person with a disability please contact me after class or during office hours and make arrangements to register with the Learning Support Office by contacting 610-519-5636 or at nancy.mott@villanova.edu as soon as possible.  Registration with the Learning Support Office is required in order to receive accommodations.  If you have a disability that may affect your success in this course and wish to discuss academic accommodations, please arrange to meet with me as soon as possible and not later than the end of the second week of the semester.  The major reason that this course will stress a student with learning disabilities is that the essay exams are time-constrained.   With most disabilities, I can simply allow you additional time during the exam.   The Learning Support Office will usually provide me with an indication as to how much additional time I should allow. 

Click here for my attendance policy.

The first two weeks we will be talking about 


Barter Exchanges
    Lack of Double Coincidence of Wants
Roles of Money

    1. Medium of Exchange
    2. Store of Value
    3. Unit of Value
    4. Standard for Contracts

Types of Money

I. Full Bodied Money
II. Representative Full Bodied Money
III. Credit Money
     A. Issued by Banks
        1. Checkable Deposits
        2. Commercial Bank Notes
        3. Central Bank Notes
     B. Issued by Governments
        1. Token Coins
        2. Representative Token Coins
        3. Notes

The Federal Reserve Bank of San Francisco has a great history of paper money
in the United States at the hyperlink below:
 
http://www.frbsf.org/currency/index.html