20505 The Financial System
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particular session, location and mode of offering is the authoritative source
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Subject handbook information prior to 2024 is available in the Archives.
Credit points: 6 cp
Subject level:
Undergraduate
Result type: Grade and marksRequisite(s): 25300 Fundamentals of Business Finance
There are course requisites for this subject. See access conditions.
Description
The aim of this subject is to develop an understanding of the operations of a modern financial system, covering its payment, financing and market-risk management activities. Its main topic areas are financial institutions, financial markets (such as stocks, bonds and foreign exchange) and derivatives (such as futures and options).
Subject learning objectives (SLOs)
| 1. | discuss how the Australian financial system performs its core financial functions; the settlement of transactions, the flow of funds and risk transfer |
|---|---|
| 2. | explain the roles and principal operations of deposit-taking financial institutions, fund management institutions and the major financial markets including the markets for derivative contracts |
| 3. | describe the structure of the main financial instruments (including the plain vanilla derivative contracts) and demonstrate their use in the flow of funds and risk-transfer functions. |
Contribution to the development of graduate attributes
The subject contributes to the aim of preparing students to commence a fulfilling and effective career in business, especially in finance professions. The particular contributions of the subject are in enabling students to understand the functions performed by the financial system, how these functions are performed by financial institutions, markets and instruments and to enhance their ability to clearly convey their knowledge in writing.
This subject contributes to the development of the following graduate attribute:
- Communication and interpersonal skills
This subject also contributes specifically to develop the following Program Learning Objectives:
- Critically analyse and produce written disciplinary texts for academic and professional audiences (3.1)
- Produce oral presentations suitable for academic and/or professional audiences (3.2)
- Demonstrate and critically reflect on how individuals work in teams in an inclusive manner (3.3)
Teaching and learning strategies
Lectures are used to guide and assist student learning, supplemented by the use of appropriate learning 2014 practices, such as on-line and off-line learning opportunities and tutorials are used to enable students to demonstrate their understanding through their responses to set questions and case studies.
Content (topics)
- Functions of a financial system;
- Deposit-taking and fund management financial institutions;
- Financial markets; short-term money, bond, foreign exchange and equity markets;
- Pricing of financial instruments and calculation of investment yields;
- Determinants of spot and forward prices and interest and exchange rates;
- Plain vanilla derivative contracts (FRAs, futures, swaps and options); their markets and their use.
Assessment
Assessment task 1: In-class quizzes (Individual)*
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 30% |
| Length: | Duration: 45 minutes |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. Failure to attend in-class quizzes There will be no alternate quiz for The Financial System. Students who fail to attend a quiz will have the weighting of that assessment task added to the final examination conditional on the students submitting, receiving approval and complying with the requirements of special consideration in accordance with the UTS rules. If no such approval is given then a mark of zero will be awarded and no further opportunities to sit for the quiz will be given. If the composite mark for the final exam is more than 50 percent, the UTS rules on borderline result (range of 45-49, inclusive) shall apply whereby students will be allowed to undertake a supplementary final examination. Where a student completes and passes a supplementary examination, the maximum mark awarded for the subject will be 50 Pass. |
Assessment task 2: Assignments (Group and Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 20% |
Assessment task 3: Final Exam (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 50% |
| Length: | Duration: 2 hours and 10 minutes (including 10 minutes reading time) |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
Ben Hunt and Chris Terry, 2018, Financial Institutions + Markets, 8th edn, Cengage Learning South Melbourne.
References
UTS Business School (2020), The UTS Business School Writing Guide. https://www.uts.edu.au/sites/default/files/2020-02/UTS%20Business%20writing%20guide%202020_0.pdf