FNCE 4000 -- FINANCIAL INSTITUTIONS MANAGEMENT



FNCE 4000 -- FINANCIAL INSTITUTIONS MANAGEMENT

COLLEGE OF BUSINESS

UNIVERSITY OF COLORADO AT BOULDER

Professor Michael Palmer

Professor of International Business and Finance

Office Phone: (303) 492-4241

E-mail Address: Michael.Palmer@Colorado.EDU

Home Page:

FNCE 4000 COURSE DESCRIPTION:

The objective of this course is to analyze the structure, markets, and regulations of financial institutions. The course will begin with an overview of financial markets, interest rates and exchange rates. Focus will be on the global nature of these financial markets. Next the course explores the problems, policies and issues associated with the internal management of financial institutions’ funds, loans, investments, deposits, capital adequacy, liquidity and solvency.

1. OVERVIEW OF FINANCIAL MARKETS, INTEREST RATES, AND EXCHANGE RATES

a. Role of financial institutions and financial markets

b. Types of financial institutions and financial markets

c. Interest rates: historical review, theories, term structure

d. Exchange rates: historical review, theories

2. INTEREST RATE AND EXCHAGE RATE RISK MANAGEMENT

a. Price yield relationship

b. Effects of interest rate changes on asset prices

c. Application of duration to asset/liability management

d. Interest rate and foreign exchange risk management

3. DEPOSITORY INSTITUTIONS MANAGEMENT

a. Types of depository institutions

b. Performance of depository institutions

c. Risk analysis

d. Capital management

4. NON-DEPOSITORY FINANCIAL INSTITUTONS

a. Types of non-depository institutions

b. Risk and management issues

5. SPECIAL TOPICS IN FINANCIAL INSTITUTONS MANAGEMENT

a. Asset management

b. Deposit and liability management

c. International management issues

TEXT AND REQUIRED READINGS:

Required Text Book: Managing Financial Institutions: An Asset/Liability Approach, Mona Gardner, Dixie Mills, and Elizabeth Cooperman, Dryden Press (2000); Fourth edition.

Required Financial Newspaper: You are required to subscribe to either the Wall Street Journal or the Financial Times. Subscription forms will be circulated. Either of these will help to keep you current on rapidly changing conditions in international markets and international business.

OFFICE INFORMATION:

Room:  453 (4th floor: Business School)

Phone:  492-4241

E-mail: Michael.Palmer@Colorado.Edu

ASSIGNED READINGS:

Readings from various publications will be distributed to the class throughout the semester. These will be “current event” articles appearing in business publications such as Business Week or academic articles appearing in academic journals. You will be responsible for reading these articles and questions from them may appear on your exams. They may also form the basis for classroom discussion.

WEEKLY TEXT ASSIGNMENTS AND EXAM SCHEDULE:

Week Topics, and Examinations Text Section

1 Introduction to the Class: Financial Markets 1-4; 14 & 15

2 Financial Markets: Interest Rates 1-4; 14 & 15

3 Financial Markets: Foreign Exchange Markets 1-4; 14 & 15

4 Interest Rate Risk Management 16-18

5 Interest Rate Risk Management 16-18

6 Foreign Exchange Risk Management 16-18

5 First Exam. Text 1-4, 14-18

6 Depository Institutions Management 5-9

7 Depository Institutions Management 5-9

8 Depository Institutions Management 5-9

9 Depository Institutions Management 5-9

10 Second Exam. Text 1-9, 14-18

11 Non-depository Institutions Management 10-13

12 Non-depository Institutions Management 10-13

13 Non-depository Institutions Management 10-13

14 Special Topics in Institutions Management 19-22

15 Special Topics in Institutions Management 19-22

16 Final Exam. All Text Chapters

EXAMINATIONS:

FNCE 4000 exams will consist of multiple-choice questions and short essay questions from the text, assigned readings, and lecture material. With the exception of assigned readings, exams will be cumulative. Exams will be given only on the days indicated. Make up exams will not be given. Please make every effort to meet this exam schedule (if there is a problem with this schedule see me as soon as possible).

COURSE GRADES:

E-MAIL COMMUNICATIONS:

During the first couple of sessions I will be collecting everyone’s e-mail address. Through a class distribution list, I will occasionally contact the class to provide you with information. This will include practice questions (prior to exams); review of material; updates on issues relevant to the class.

COURSE GRADES:

Final course grades will be determined on the basis of the following:

1. Three exams: 100% (25%; 35%; 40%)

ADDITIONAL INFORMATION:

-- Name cards and Wall Street Journal/Financial Times subscription forms.

-- Attendance and class participation.

-- London International Finance Summer Study Abroad Program.

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