FIN 508: Analysis of Financial Markets
Analysis of factors affecting price determination in financial markets.
Overview | Objectives | Materials | Library Resources | Technical Requirements | Assignments | Grading | Course Schedule | Course Policies | Academic Integrity | Accommodating Disabilities | Additional Policies | Program Residency
Overview
The purpose of the course is to provide students with comprehensive knowledge of the fundamental macroeconomic and global financial market forces that influence corporate businesses and public entities’ investing, financing, and risk management strategies. Central objective is to develop critical thinking skills and managerial decision proficiency through application of underlying economic principles to the real world business decision scenarios.
FIN 508 analyzes the global economic and financial system and offers integrated applications to business and public entities. Economic topics include analysis of the impact of macroeconomic conditions and government fiscal policies on businesses. Global financial markets topics include studying the determinants of interest rates, term structure of interest rates, asset pricing in bond and equity markets including duration and convexity, and exchange rates in foreign exchange markets. The course also explores the impact of monetary policy and regulation in determining the risk-return dynamics in financial markets as well as institutional and corporate strategic responses.
Course Objectives
At the completion of the course students should be able to accomplish the following:
- Develop an analytical framework (integrating global market structures, government policy regimes, corporate stakeholder preferences, and value maximization goal) for planning, implementing, and evaluating corporate financial strategies.
- Understand the functioning and structures of global financial markets and assess their role in shaping corporate and institutional investing, financing, and risk management strategies.
- Arrive at investing and financing decisions in corporate entities during normal and distressed market scenarios, utilizing the risk-return framework.
- Conceptualize, design, implement, and evaluate various methods of making business organizations resilient to macro shocks and business cycles.
- Assess political and economic risks in international markets and plan strategies to minimize their adverse impact on corporate performance while tapping into new opportunities.
- Evaluate the role of government fiscal and monetary policies in determining financial markets and corporate strategic behavior.
Required Course Materials
Most World Campus courses require that students purchase materials (e.g., textbooks, specific software, etc.). To learn about how to order materials, please see the Course Materials page. You should check LionPATH approximately 3–4 weeks before the course begins for a list of required materials.
IMPORTANT: The text is meant for just supplementing (and serving as a background reference) rather than replacing the class discussions and notes. The flow of class discussions may not follow the exact structure and content of the text chapters. We will however do some text-based exercises given as end of the chapter problems to reinforce our class learning. They will also help you solve homework assignments and solve exam problems. Please read the text so you can participate well in the cases/notes discussions. Classroom discussion of the text chapters will be minimal.
Required Additional Readings and Case Package:
The following material can be purchased from the Harvard Business Review (HBR) Web site:
- Alfaro, L. & Kim, R. (2009). The First Global Financial Crisis of the 21st Century
- Alfaro, L. & Kim, R. (2009). U.S. Subprime Mortgage Crisis: Policy Reactions (A)
- Alfaro, L. & Kim, R. (2009). U.S. Subprime Mortgage Crisis: Policy Reactions (B)
- Chacko, G., Hecht, P. Dessain, V. & Sjoman, A. (2004). Note on Duration and Convexity.
- Trumball, G., Roscini, D., & Choi, D. (2011). The Euro in Crisis: Decision Time at the European Central Bank.
- Wong, K, Fung, K. C., & Lai, R. (2008). China's Renmibi: "Our Currency, Your Problem"?
To Access Harvard Business Review Articles: Go to the HBR website and make sure you register so you can access your course readings. (You will need to register, but you do NOT need to subscribe.) You will need to purchase your HBR readings using your credit card. To read PDF articles, make sure you have the Adobe Reader, which can be downloaded for free from Adobe.com. For technical assistance contact Harvard Business School Publishing at 1-800-810-8858.
Your custom course materials published by Harvard Business Review contain required readings that have been carefully selected for this course. If you hope to do well in this course, it is important that you purchase it and always stay on top of your readings.
Additional Recommended Material:
The Wall Street Journal, Financial Times, and Business Week publications
Library Resources
Many of the University Libraries resources can be utilized from a distance. Through the Libraries website, you can
- access magazine, journal, and newspaper articles online using library databases;
- borrow materials and have them delivered to your doorstep—or even your desktop;
- get research help via email, chat, or phone using the Ask a Librarian service; and
- much more.
You must have an active Penn State Access Account to take full advantage of the Libraries' resources and service. The Off-Campus Users page has additional information about these free services.
Required Library Articles:
The following articles can be accessed from the Penn State Library's Web site:
- Anonymous. (2010). Beyond Bretton Woods 2; The global monetary system. The Economist.
- Ausick, P., McIntyre, D. A., & Stockdale, C. (2011). America's recession-proof companies.
- Blanchard, O. (2009). The Crisis: Basic Mechanisms and Appropriate Policies.
- The Huffington Post. (2011). 8 big companies that beat the recession.
- Navarro, P. (2009). Recession-proofing your organization. MIT Sloan Management Review.
- Navarro, P. (2005). The Well-timed strategy: Managing the business cycle. California Management Review.
- Thomson Reuters (2010). Factbox: Major financial regulation reform proposals.
Technical Specifications
Note: Courses that are designated as running in Canvas have different technical requirements. For those courses, please review the Canvas Technical Requirements for MFIN courses.
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| Operating System | Windows Vista, Windows 7, Windows 8* Macintosh users may have problems using the specialized software required in some courses. *Windows 8 support excludes the tablet only RT version |
| Processor | 1 GHz or higher |
| Memory | 2 GB of RAM |
| Hard Drive Space | 500 MB free disk space |
| Browser | We recommend the latest Angel-supported version of Firefox or
Internet Explorer. To determine if your browser fits this criteria and
for advice on downloading a supported version, please refer to the
following ITS knowledgebase article:http://kb.its.psu.edu/cms/article/6
Note: Cookies, Java, and JavaScript must be enabled. Pop-up blockers should be configured to permit new windows from Penn State web sites. Due to nonstandard handling of CSS, JavaScript, and caching, older versions of Internet Explorer (such as IE 6 or earlier) do not work with our courses. |
| Plug-ins | Adobe Reader [Download from Adobe]
Flash Player [Download from Adobe] |
| Additional Software | Microsoft Office 2007 or higher |
| Internet Connection | Broadband (cable or DSL) connection required |
| Printer | Access to graphics-capable printer |
| DVD-ROM | Required |
| Sound Card, Microphone, and Speakers | Required |
| Monitor | Monitor (Capable of at least 1024 x 768 resolution) |
To ensure instructional videos play correctly on your computer:
- Ensure that your javascript is enabled in your browser. Visit the Enable JavaScript in my browser webpage which will help you through the process of enabling your javascript - https://www.google.com/adsense/support/bin/answer.py?answer=12654.
- Ensure that you have at least Flash Player 11.0 installed. Visit the Install Adobe Flash Player webpage which will help you through the process of installing the flash player - http://get.adobe.com/flashplayer/.
If you need technical assistance at any point during the course, please contact the Service Desk.
For registration, advising, disability services, help with materials, exams, general problem solving, visit World Campus Student Services!
Course Assignments
Group-Based Homework Problem Sets
You will be required to complete five group-based homework problem sets. Please refer to the course schedule for due dates. To assist you with team discussions, there will be a team discussion forum set up in each of the modules so only the members of each team can access their forum as a means to communicate. Feel free to use them as often as you need to when completing each of the assignments. You can also use other means of communication with your team, such as Collaborate, Skype, e-mail, phone, etc.; whichever communication tool works best for your group. Use Excel and incorporate spreadsheet output (show your work) in your submissions. Please put the module number and team name in the subject of the message (e.g. FIN508_HW1_Team1). The team response to these problems will be submitted to a peer-review drop box so that responses to the problems can be viewed by all students. If you find errors in any problems posted by another team, feel free to post a correction and explanation. The purpose of the submissions is to build resources to refer to when in subsequent MFIN courses. Solutions to these problems will be provided for self-checking by students. Please try to solve the problems on your own prior to viewing the solutions.
Note: The group-based homework problem sets will not be graded. However, it is mandatory for teams to submit the assignments for final grade release.
Class Participation Through Case Discussions
There will also be two discussion forums where the instructor will initiate discussion related to the cases (one forum for cases 1, 2, and 3 and a second forum for cases 4 and 5). All students are expected to actively participate (on an individual basis) in each of the online discussion forums and answer all assignment questions. Students should also be conversant with current finance news from The Wall Street Journal/Financial Times as they relate to course topics and be prepared to discuss them. Students will be required to use the Internet to access financial data for class discussions.
The case discussions will comprise 10% of the final grade (5% for each case discussion). Please refer to the Class Participation Grading Rubric to view grading components and values for this part of the assignment. You can also access this file by clicking on the Activities link in the left-hand menu and selecting the folder Course Grading Rubrics.
Finally, check the due dates listed in the course schedule section of the syllabus for each case discussion.
Quizzes
There will be three graded quizzes (worth 10% each) for you to complete during the semester, which will cover the content of modules, assigned textbook readings, and associated problem assignments. The quizzes will prepare you for the final exam. Please refer to the course schedule for due dates.
Final Exam
There will be one final comprehensive exam. The exam will consist of multiple-choice questions and a numerical problem. The exam will be available for students to complete during the last week of the course. The exam will be available for students to complete starting Monday at 8 a.m. (ET) of the last week of class and will need to be submitted by the following Monday at 3 a.m. (ET). Additionally, your work will be graded based on the criteria listed in the Exam Grading Rubric. You can also access this rubric by clicking on the Activities link in the left-hand menu and selecting the folder Course Grading Rubrics.
Note: No makeup examinations will be given for any reason except for medical emergency. Vacation plans, nonrefundable airline tickets, etc. are not acceptable excuses. The final exam will comprise 40% of the final course grade.
Spreadsheet Model Building Exercises
There will be a number of financial model building exercises covered in the class using Excel. These exercises will be included within the homework assignments, case assignments, and final exam so you have sufficient practice in strengthening your model-building skills. We will complete several exercises to gain sufficient practice applying the tools and concepts to actual managerial decision scenarios. Please sharpen your Excel skills quickly to ensure that you do not hinder your ability to learn finance and economics.
Please carefully see the summary of deliverables, grading weight, grading rubric, and the due dates for each deliverable to plan ahead and efficiently allocate your time throughout the semester. Academic dishonesty will be dealt with in accordance with the Penn State University provisions.
Grading
| Grading Component | Type | Weight |
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| Group-Based Homework Assignments (5 sets) | Team | (Ungraded; Although, submission is mandatory for final grade release) |
| Class Participation Through Case Discussions (2) | Individual | 10% (5% each) |
| Quizzes (3) | Individual | 45% (15% each) |
| Final Exam | Individual | 45% (Quiz = 35%; Problem Set = 10%) |
| Letter Grade | Percentage |
|---|---|
| A | 95 and above |
| A- | 90-94 |
| B+ | 85-89 |
| B | 80-84 |
| B- | 75-79 |
| C | 65-74 |
Please refer to the University Grading Policy for Graduate Courses for additional information about University grading policies.
FIN 508 Course Schedule
[printer-friendly version]The schedule below outlines the assignments that we will be covering in this course.
Each assignment is identified as individual (I), team (T), graded (G), or ungraded (U).
| Module 3 Topic: | Interest Rates and the Prices of Financial Assets and Duration and Convexity |
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Week 3 |
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Total video time for this module is 2:47:21.
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All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise. |
| Module 4 Topic: | The Monetary Policy, Financial Markets, Central Banking, and the Regulation of Financial Institutions |
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Week 4 |
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Readings:
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Total video time for this module is 4:07:40.
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All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise. |
| Module 5 Topic: | Financial Regulation and Financial Crises |
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Week 5 |
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Readings:
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Total video time for this module is 1:53:51.
Note: It is expected that while answering questions in the assignments for Modules 5, 6, and 7 these videos will be referenced. The videos can be found within the course content. |
| Assignments: |
All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise. |
| Module 7 Topic: | Emerging Trend in a Global Market Place-China Exchange Rate Policies and Emerging Trends in European Financial Markets |
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Week 7 |
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Readings:
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All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise. |
Course Policies
Late Policy
The course schedule is strictly adhered to. Late assignments/discussion participation, and the exam will be accepted ONLY if the instructor is notified prior to the due date of a special circumstance that cannot be avoided. Students will receive a zero for late work without an acceptable reason.
Academic Integrity
According to Penn State policy G-9: Academic Integrity , an academic integrity violation is “an intentional, unintentional, or attempted violation of course or assessment policies to gain an academic advantage or to advantage or disadvantage another student academically.” Unless your instructor tells you otherwise, you must complete all course work entirely on your own, using only sources that have been permitted by your instructor, and you may not assist other students with papers, quizzes, exams, or other assessments. If your instructor allows you to use ideas, images, or word phrases created by another person (e.g., from Course Hero or Chegg) or by generative technology, such as ChatGPT, you must identify their source. You may not submit false or fabricated information, use the same academic work for credit in multiple courses, or share instructional content. Students with questions about academic integrity should ask their instructor before submitting work.
Students facing allegations of academic misconduct may not drop/withdraw from the affected course unless they are cleared of wrongdoing (see G-9: Academic Integrity ). Attempted drops will be prevented or reversed, and students will be expected to complete course work and meet course deadlines. Students who are found responsible for academic integrity violations face academic outcomes, which can be severe, and put themselves at jeopardy for other outcomes which may include ineligibility for Dean’s List, pass/fail elections, and grade forgiveness. Students may also face consequences from their home/major program and/or The Schreyer Honors College.
How Academic Integrity Violations Are Handled
World Campus students are expected to act with civility and
personal integrity; respect other students' dignity, rights, and
property; and help create and maintain an environment in which all
can succeed through the fruits of their own efforts. An environment
of academic integrity is requisite to respect for oneself and
others, as well as a civil community.
In cases where academic integrity is questioned, the Policy on Academic Integrity indicates that procedure requires an instructor to inform the student of the allegation. Procedures allow a student to accept or contest a charge. If a student chooses to contest a charge, the case will then be managed by the respective college or campus Academic Integrity Committee. If that committee recommends an administrative sanction (Formal Warning, Conduct Probation, Suspension, Expulsion), the claim will be referred to the Office of Student Accountability and Conflict Response.
All Penn State colleges abide by this Penn State policy, but review procedures may vary by college when academic dishonesty is suspected. Information about Penn State's academic integrity policy and college review procedures is included in the information that students receive upon enrolling in a course. To obtain that information in advance of enrolling in a course, please contact us by going to the Contacts & Help page .
Accommodating Disabilities
Additional Policies
For information about additional policies regarding Penn State Access Accounts; credit by examination; course tuition, fees, and refund schedules; and drops and withdrawals, please see the World Campus Student Center website.
Program Residency
One of the most unique aspects of the Penn State online Master of Finance degree program is the on-campus residency. In this interactive residency, you will work closely with the program faculty to receive hands-on, model-building experience, using a complex simulation tool. Even though the residency will not take place until BUSAD 526, we would like to introduce you to this information so you can begin making arrangements. Please access the MFIN Online Residency Overview for more information.
Disclaimer: Please note that the specifics of this Course Syllabus are subject to change, and you will be responsible for abiding by any such changes. Your instructor will notify you of any changes.