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25556 The Financial System

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2019 is available in the Archives.

UTS: Business: Finance
Credit points: 6 cp

Subject level:

Undergraduate

Result type: Grade and marks

Requisite(s): 25300 Fundamentals of Business Finance
These requisites may not apply to students in certain courses.
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)

Upon successful completion of this subject students should be able to:
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 attributes:

  • Business knowledge and concepts
  • Communication and interpersonal skills

This subject also contributes specifically to develop the following Program Learning Objectives:

  • 1.1: Critically analyse relevant concepts to understand practice in business and related professions in a global workplace
  • 3.1: Convey information clearly and fluently in high quality written form appropriate for their audience

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: 40 minutes

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, 2015, Financial Institutions + Markets, 7th edn, Cengage Learning South Melbourne.

References

Faculty of Business, 2014, Guide to Writing Assignments, http://www.uts.edu.au/sites/default/files/business-writing-guide-2014.pdf