E&M 346 – Financial Markets

Syllabus Fall 2021


MWF 2:15-3:20 Rob 402
Prof. Jon A. Hooks
Office: Rob Hall Office 103
jhooks@albion.edu
Student Hours


REQUIRED READINGS

(1)   Financial Markets and Institutions, 13th ed. (2021). Jeff Madura. See the bookstore.

(2) A Random Walk Down Wall Street, 12th ed. (2020). Burton Malkiel. I will discuss this book in class before you need to purchase it.

Regular reading of the Wall Street Journal is required. As they arise, contemporary issues will be incorporated into the discussion and exams.

Journal articles and other readings may be placed on reserve in the library. These readings will be announced in class.

COURSE OUTLINE

COURSE DESCRIPTION

This class is an introduction to the many facets of U.S. financial markets. The focus is on how resources are efficiently transferred from those with a surplus to those with a deficit, and on the instruments which facilitate this transfer. The discussion will be divided into four major sections: (1) Financial Markets, Flow of Funds, and Financial Intermediaries; (2) Bond Markets and Interest Rate Determination; (3) Equity Markets and Market Efficiency; and (4) Derivatives.

Each section will consist of institutional information as well as important theoretical considerations. In addition, each section will consider the role of both the individual and institutional participant.

COURSE OBJECTIVES

A major goal of this class is to develop the ability to analyze financial market issues in a structured, cost-benefit framework. Thus, while having institutional knowledge about markets, institutions, and instruments is necessary, so is the ability to solve analytical problems that arise in this context. To this end, our approach will focus on three goals: (1) build an institutional knowledge of financial products and institutions; (2) develop an understanding of major theories in finance; and, (3) develop problem solving skills.

COURSE REQUIREMENTS

You are required to come to class every day unless you have:

  • official school business which you have cleared with me ahead of time by email
  • a documented family emergency (cleared by email in advance when possible)
  • a serious unexpected illness (non emergencies must be cleared by email in advance)

ALL communications with me on these matters must be by email, and I may require additional documentation in writing. In NO case can face-to-face communication alone ever satisfy this requirement.

If you are formally approved for special accommodations on exams, you must notify me before each exam by email. All arrangements will then be carried out by Renee, and all exams must be taken in Robinson Hall in the room assigned. No special accommodations are given for quizzes, homework, or projects.

You are expected to read assigned material BEFORE each class, and be prepared to discuss it.

GRADING

Grades will be based on four 100-point exams (all noncumulative), a two-part options project (50 points), 2-3 quizzes worth 20-25 points each (usually announced in advance), and frequent (almost daily) in-class problem sets that will total up to approximately 100 points (usually 5-10 points each). I reserve the right to change these requirements with reasonable notice. Final grades will be based the total possible points and the following grading scale:

93-100….. 4.0
89-92……. 3.7
85-88……. 3.3
80-84……. 3.0
75-79……. 2.7
70-74……. 2.3
65-69……. 2.0
60-64……. 1.7
55-59……. 1.3
50-54……. 1.0
< 50……… 0.0

Please feel free to check with me anytime concerning your performance in class, or any problems you are having. Also, feel free to visit the Albion College Cutler Center.

College Accommodations Statement: It is the policy of Albion College to accommodate students with disabilities and qualifying diagnosed conditions in accordance with federal and state laws. Any student who feels that they may need an accommodation based on the impact of a learning, psychiatric, physical, or chronic health diagnosis, should contact Accessibility Services Director, Elizabeth Rudolph (erudolph@albion.edu), to develop a plan for reasonable accommodation(s) based on supporting documentation.

If you have completed this process and requested accommodations for this semester, plan to meet with Elizabeth Rudolph as early as possible to discuss a plan for implementing these modifications in this class. It is best to schedule this meeting at least one week prior to their implementation.

Accessibility Services is housed in the Cutler Center on the first floor of the Stockwell Library and is open during regular business hours. The main phone is 517/ 629-0562 or email cutler@albion.edu for more information.

College Statement of Academic Integrity: As an academic community, Albion College is firmly committed to honor and integrity in the pursuit of knowledge. Therefore, as a member of this academic community, each student acknowledges responsibility for his or her actions and commits to the highest standards of integrity. In doing so, each student makes a covenant with the college not to engage in any form of academic dishonesty, fraud, cheating, or theft.

College Statement on Attendance: Regular attendance in all classes is expected. Every absence from class is inevitably a loss—usually one which can never be made up. A student has the responsibility to inform his or her faculty member, whenever possible in advance, of an absence due to serious or prolonged illness, and verification of absences due to emergency reasons, may be obtained from the Office of Residential Life.

Cutler Center Information: The Cutler Center is located in the Stockwell Library and provides free supplemental peer tutoring (math, science, economics and more), writing assistance, fellowship advising, accessibility accommodations, success coaching, supplemental advising, financial advising (including loaner laptops and calculators). The Cutler Center has student drop-in hours Monday-Friday noon-2pm with their 15 Minute Fix. The Cutler Center is also home to the First-Year Peer Mentor Program. To connect with the Cutler Center, please email cutler@albion.edu or call Martha Palmer at 517-629-0562 and she can help connect you to the resource you need to be successful this term.

When Calhoun County is experiencing substantial or high COVID-19 transmission rates, students must wear a mask at all times in classrooms and other indoor public spaces. Research clearly indicates that an infected person wearing a mask may reduce the likelihood of spreading the disease to others. Since a person infected with COVID-19 may not exhibit symptoms for several days, they may unknowingly spread the virus when interacting with others. If Calhoun County transmission rates drop to low or moderate levels, then vaccinated individuals will be allowed to remove masks indoors, but unvaccinated individuals must still wear masks indoors at all times.

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