College of Business - Department of Finance

UNIVERSITY OF ILLINOIS

College of Business - Department of Finance

Finance 300 (Financial Markets)

Professor James Jackson

Email: See Compass Mail for Sections N1, R, & S. (No CITES email messages will be receive a response)

Required Text: Financial Markets…, First Edition, E. Oltheten, K. Waspi; Stipes Publishers, Fall 2006.

Prerequisite Courses: Finance 221.

Class Hours: TTH 9:30 AM -10:50 AM – 1025 BIF (Section N1)

TTH 12:30 PM - 1:50 PM – 2057 BIF (Section R)

TTH 2:00 PM - 3:20 PM – 2011 BIF (Section S)

Office Hours: W 1:00 PM– 4:00 PM (4029 BIF)

Course Website: http://www.business.uiuc.edu/broker/fin300/default.asp?code=jackson

Compass Website (All Sections and Sections N1, R, & S Only): https://compass.uiuc.edu/

Course Description

Finance 300 (Financial Markets): This course is designed to be an introduction to the theories and applications associated with the functions and assets classes of capital markets. The markets that we will investigate include the equity, money, bonds, mortgages, futures, options and swaps markets. The theories and applications include discussions of media and market information, portfolio theory, the capital asset pricing and arbitrage pricing models, the valuation and selection of securities to meet alternative investment objectives of both individual and institutional investors. We will also engage in a business ethics exercise throughout the semester that will incorporate an online discussion and scenario analysis that includes specific objectives and assessment exercises designed to explore crucial issues in business ethics.

Course Objectives

Students should leave this course with a better understanding of the following topics:

• The scope and foundations of financial market practice, theory, and structure.
• The methods of making objective investment analysis and decisions.
• The theory and application of strategies related to various asset classes including equity, fixed income, foreign exchange, and derivatives.
• The world economy, capital flow, and globalization.
• Basic statistics and linear regression analysis as it relates to financial market applications.
• MS Excel spreadsheet skills related to modeling financial market applications.
• Ethical practices in business, finance, and accounting.

General Course Requirements

• Prerequisite Examination (covering appropriate material from Finance 221)
• Two investment analysis team projects (one equity project, one debt project: maximum 4 students per team)
• Finance 300 Investment Challenge Team Project (maximum 4 students per team)
• Pop Quizzes
• Three in-class exams &Cumulative Final Exam (Covers Equities, Bonds, & Derivatives)

Grading Outline

A total of 720 points will be used for grading the course. Letter grades using “plus and minus” will be assigned at the end of the term. The three highest scores of the prerequisite examination plus the three in class exams will count as 120 points (16.67%) each of the total. There will be eight (8) pop-quizzes, each worth 5 points, for a total of 5.56% of the semester. The cumulative Final Exam is 180 points (25.0%) of the total. The equity team project and bond team project will each count 40 points (5.56% each) of the total. The Investment Simulation Stewardship Reports will count as 60 points (8.34%) of the total.

Group projects are not accepted without a validly executed “Group Project Point Allocation Contract” attached. The contract will distribute the score of the project proportionately to each group member, (subject to a 10% min) as group members direct. All members to the group must agree to the allocation, and if they do not, binding arbitration will direct the allocation. Maximum grade on all assignments is 100%. A student must have a passing average in both the group work and individual work components in order to receive a passing grade for the course. A failing average in either component will result in a failing grade for the course regardless of the overall average.

For a complete breakdown of the point assignments see “Grading Criteria” at:

http://www.business.uiuc.edu/broker/fin300/default.asp?code=jackson

Course Policies

There will be no makeup exams or quizzes, no exceptions. No late assignments will be accepted.

Students must take the Assessment Exam in order to remain registered in the class. Students can then take any two of the three in-class mid-term exams. If a student chooses to take all three mid-term exams then the lowest of the three mid-term exam scores will be dropped from the grade calculation.

Missed exams will receive a grade of 0%. The first missed quiz will receive the average quiz grade for all sections (1 quiz max.). The average of all quiz grades will be calculated by first assigning a grade of zero for all students who miss the quiz. Then, once the average has been calculated including all 0% grades, students who missed the quiz will receive the average calculated grade for all sections (N1, R, & S). All subsequent missed quizzes will receive a grade of 0%. All quizzes and exams must be taken in the student’s registered section. Any student taking an exam or quiz in a section for which he/she is not registered will receive a grade of 0% for the exam or quiz. This grade cannot be dropped.

Financial Calculator: Two models of business calculator are authorized for use on the exams: the Texas Instruments BA II Plus and the Hewlett Packard 12C (including the HP 12C Platinum). These are the same two calculators that are authorized for use on the CFA exams. Calculator policy will be strictly enforced on all exams. It is recommended that you bring your book and calculator to every class session.

No cell phones, text message devices, MP3 players, or laptop computers are allowed during class time unless specifically given permission by the professor.

Expect to spend approximately 10 hours per week outside of class working on Finance 300 materials.

The Prerequisite Examination is scheduled for Tuesday, September 1 at 7pm. You must attend at least two of the first three classes and write the assessment exam or you will be subject to expulsion from the course. We will be covering a great amount of material in this short time so please use your time wisely. Topics from the text will be covered in order of the Table of Contents as closely as possible. For a complete listing of exam dates and project due dates see “Calendar of Exams and Due Dates” on my homepage: http://www.business.uiuc.edu/broker/fin300/Professors.asp?code=jackson.

Course Calendar

Academic Integrity: The University statement on your obligation to maintain academic integrity is:

If you engage in an act of academic dishonesty, you become liable to severe disciplinary action. Such acts include cheating; fabrication or invention of information or citation in an academic endeavor; helping or attempting to help others commit academic infractions; plagiarism; bribes, favors, or threats; academic interference; computer related infractions; unauthorized use of university resources; sale of class materials or notes; failure to comply with research regulations. Part 4 of the Student Code gives complete details of rules governing academic integrity for all students. You are responsible for knowing and abiding by these rules. Giving or receiving assistance on a graded work meant as individual effort will result in a score of zero for the work, along with other potential consequences.

The Student Code is available on the web at: http://www.admin.uiuc.edu/policy/code/

Grading Scale

All grades will be recorded as earned. There will be no “curved” grades for any assignment in this course, nor will the final course grade be “curved”. Final grades will be calculated and reported to two decimal places. There will be no rounding of final grades.

1