25937 Financial Markets: From Fundamentals to FinTech
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Credit points: 6 cp
Subject level:
Undergraduate
Result type: Grade and marksThere are course requisites for this subject. See access conditions.
Description
This subject teaches students about financial markets and their evolution from both applied and research perspectives. It starts with the fundamentals: how markets are designed and operate, their roles, measuring liquidity and price discovery, and interactions between financial markets, asset pricing, and corporate finance. It then covers recent innovations and contemporary issues in traditional financial markets, including fragmentation of trading across competing markets, algorithmic and high-frequency trading, dark pools, recent regulation, and market design innovations. Finally, it turns to the rapidly evolving Decentralised Finance (DeFi) and Financial Technology (FinTech) ecosystems that are reshaping financial markets and the financial services industry, covering the underlying technologies (blockchain, smart contracts, tokenisation), the applications (Decentralised Exchanges (DEX), Automated Market Makers (AMM), tokenised securities, non-fungible tokens (NFT), peer-to-peer lending/borrowing, insurance and derivatives), and finally the challenges, risks, and future research areas.
Subject learning objectives (SLOs)
| 1. | apply an understanding of different financial market architectures and design features |
|---|---|
| 2. | explain the key roles of markets and their interactions with asset pricing and corporate finance |
| 3. | discuss and evaluate technology-driven innovations in markets |
| 4. | estimate empirical measures of market quality including liquidity and price discovery |
| 5. | identify research issues and develop research proposals to address those issues |
Contribution to the development of graduate attributes
This subject contributes to the degree by exposing students to the core principles of financial markets.
Financial markets play an important role in the economy, and the subject explains how financial markets fulfil that role. Students develop teamwork skills through collaborative in-class activities and group work. They also develop oral and written communication competencies via their individual and group assignments.
The subject is aligned with the following graduate attributes:
- Intellectual rigour and creative problem solving
- Communicating and collaboration
- Professional and technical competence
This subject also contributes specifically to develop the following Program Learning Objectives:
- Apply critical thinking and analytical skills in the process of completing a research project (1.1)
- Communicate research and its potential impacts effectively to a range of audiences (2.1)
- Apply the appropriate research method and analytical tools in addressing discipline specific problems (4.1)
Teaching and learning strategies
Students will have pre-readings to complete before in class lectures/seminars and discussions, including a mix of chapters, journal articles, and industry reports. Additional (optional) extension materials will be provided in the form of recorded videos and further readings to allow students to delve deeper into topics of particular interest. Pre-class quizzes will be used for students to get feedback on their comprehension of the subject matter. Students will present their research proposals in class to obtain instant feedback and promote the exchange of ideas. Students will work in small groups on empirical exercises and DeFi application case studies to encourage cohort building and peer learning.
Content (topics)
- Roles of markets
- Market architectures (limit order books, dealer markets, decentralised markets, auctions)
- Market microstructure theory, adverse selection, and learning from order flow
- Financial markets, asset pricing, and corporate finance
- Market liquidity
- Price discovery
- Innovations in traditional markets (fragmentation, algorithmic trading, dark pools)
- DeFi infrastructure (blockchain, smart contracts, tokenization, oracles)
- DeFi/FinTech applications (automated market makers, tokenised securities, non-fungible tokens, peer-to-peer lending/borrowing, insurance and derivatives)
- Challenges and future research areas
Assessment
Assessment task 1: Research Proposal (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 3 and 5 |
|---|---|
| Weight: | 35% |
| Length: | Students will have up to 10 minutes of presentation and 5-10 minutes of Q&A. The written research proposals will be up to 3 pages (1.5 spacing, font size 11) excluding |
| Criteria: |
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Assessment task 2: Market Evaluation Assignment (Individual)
| Objective(s): | This addresses subject learning objective(s): 1 and 4 |
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| Weight: | 35% |
| Length: | The written report will be up to 8 pages (1.5 spacing, font size 11) excluding tables, figures, and references. Students will also submit their data and code - there is no limit on the length of this component. |
| Criteria: |
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Assessment task 3: Case Study Assignment (Small group)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 30% |
| Length: | Students will have 10 minutes of presentation and 10 minutes of Q&A. The written reports will be up to 5 pages (1.5 spacing, font size 11) excluding tables, figures, references and appendices. |
| Criteria: |
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Minimum requirements
Students must achieve at least 50% of the subject’s total marks