FALL 2004
WEATHER
CHECK:
(203) 392-7769
COURSE
NUMBER: FIN
455
COURSE
TITLE:
Securities Markets
COURSE
DESCRIPTION:
An analysis of securities markets, including economic forecasting, interest
rate analysis, portfolio strategy and investment management.
PRE-REQUISITES:
PROFESSOR: Dr Robert M. Eldridge
Seabury
Hall 304
Telephone: Office:
203-392-5628
Home: 203-876-5046
Email: eldridger1@southerncrt.edu
Fax:
203-392-5863/5254
OFFICE
HOURS: Tues:
1600-1900; Wed 1600-1800; Thurs: 1100-1300; or by appointment
CLASS
HOURS: Wed
1815-2045, BU426
REQUIRED
MATERIALS:
1. “Financial Markets and
Institutions: A Modern Perspective” by Saunders and Cornett, 2nd
edition. New York:
McGraw Hill:
Irwin. 2004.
2. A subscription to the Wall
St Journal.
COURSE
OBJECTIVES:
This course builds upon FIN 340, Capital Formation. The objective is to conduct
an examination in
some
depth of the financial markets and their products, to include derivative
instruments. At the end of the
course
the student should have a good understanding of both the markets and their
products.
METHOD
OF INSTRUCTION:
The method of instruction will be primarily lectures and problems from the
textbook and the
World Wide Web.
METHOD
OF GRADING:
2 papers @
7.5%
15%
3 exams @ 25%
75%
“Two minute
drills” 5%
Ethics
questions
3%
Participation and
attendance 2%
SPECIAL
NOTES:
1. Two minute drills. At the
end of each class there will be a one question quiz lasting two minutes. I will
take the top ten grades. This will constitute 5% of the final grade.
2. At the end of the course, the student will be requested to complete a “Course Survey” form, separate and distinct from any University Evaluation form. This survey helps me in preparing the course for the next time that I teach it. For each original form returned, 1/n points will be added to the final grade, where “n” represents the number of students on the registrar’s final class list.
3. The student is permitted and
encouraged to tape record lectures for personal use only.
4. If you have a
disability-related need in order to participate in this course, such as special
seating, note-taking assistance, use of tape recorders or modified exam
conditions, you will need to visit the Disability Resource Office, EN B220, to
arrange for approved accommodations. If you have other information you wish to
share with me, such as emergency medical information, or arrangements in case
the building has to be evacuated, please tell me as soon as possible.
5. Some thoughts on writing. I
do not expect Nobel prize quality literature (or even
Pulitzer prize quality for that matter). I do expect the following:
a. Each sentence must have a
subject and verb.
b. Subject and verb must agree
in number.
c. All words must be properly
spelled. There is no excuse for misspelling. I will accept either British or
American spelling.
d. Indefinite pronouns must
agree in number with the proper nouns to which the pronouns apply.
e. Company names are often
compound singular nouns (for example General Motors), and therefore take a
singular pronoun (it).
f. Thou shalt
not:
1. Leave a dangling participle.
2. Leave a dangling
preposition.
3. Split an infinitive.
g. Unless requested to do so,
do not write from the perspective of the first person singular.
h. Basic punctuation is
expected, especially in the use of apostrophes for the possessive.
i.
Use of the verb “to go” as a surrogate for the verb “to say” will cause
me to instantaneously dematerialize and most likely haunt your speech/writing
patterns for the rest of your life. In a similar fashion, the word “like” is
not sugar or salt, to be casually sprinkled into your speech/writing habits.
It, too, will cause me untold grief and torment and both errors will most
likely guide my marking pen when making out grades.
j.
If you use a direct quotation, be sure to put it in quotation marks and
properly referenced. If not so done, you will have committed plagiarism – the
worst academic sin – and suffer accordingly.
k. I have developed a phobia:
cell phones and pagers that go off in class. To maintain good diplomatic
relations with me, please turn off all communication devices in the classroom.
NO EXCEPTIONS UNLESS PREVIOUSLY APPROVED BY ME.
EXPECTATIONS:
A. What
you may expect from me.
1. A strong grounding in
financial markets and their products.
2. A willingness to work with you
on specific problems of the course or its scheduling.
3. A sense of excitement about
the field of finance.
B. What I expect from you:
1. Come to class prepared by
having read the assignment and at least tried to do the homework problems.
2. If you know you will miss a
class, a call to me in advance would be appreciated.
3. If something does not make
sense, you will ask me either in class, in office ours or call mea t home.
4. A sense of what is going on
in the world of financial markets by a daily reading of the Wall st Journal.
ASSIGNMENT
SCHEDULE *:
Date Chapter Topic Remarks
Sept 01 1,2
Introduction
08
3,4
15 5,6
22 7,8
29 Exam 1, Chapter 9
Oct 06 10,11
13 12,13
20 14,15
27 16,17
Nov 03** 18,19
10 Exam 2, Chapter 20
17 21,22
24 23,24
Dec 01 25
08
15 Final exam 1930-2130
·
Subject to change as conditions dictate as determined by the
instructor.
** There will be no physical class this week as I am
at a conference in California. I plan to hold the class electronically via the
MYSCSU chat room facility
PAPERS:
This course requires two research papers. The first paper will be a joint effort of 2 or more students working together. The second paper will be done by each student individually. The topics will be as follows:
A. Joint paper: This paper will look at the Sarbanes-Oxley Act of 2002, a response to Enron and accounting scandals that have occurred over the last few years. The class will do three papers from this act: Group I : The impact of the act on the accounting profession; Group II: the impact of the act on markets; Group III: the impact of the Act on companies. Copies of the act will be provided
B. Individual research papers: The below listed topics are suggested for the second paper. If the student wishes to write a paper on another subject, please check with the instructor first.
1. A study of why the merger between the American Stock Exchange and the NASDAQ did not work.
2. A review of the restructuring of the NYSE over the past year.
3. Examine the changes in the structure of the Chicago Board of Trade. Why did it become a stock issuing firm?
4. What is the Rule 144a market? Why is it called the "Upstairs Market"? Why was it created?
5. Some years ago the Congress mandated a "National Market System". What is meant by the term? What has happened to the Congressional mandate.
6. What are the regional stock markets? Where are they located? What economic functions do they serve?
7. Identify the listing requirements for the NYSE, AMEX and NASDAQ. What benefits does each market provide.
8. Discuss the development and nature of the 2004 IPO for Google. Why did it list on the market it did, rather than on the NYSE? Why is this IPO important to the manner of bringing new securities to market?
9. What are the Electronic Communication Networks? What is the benefit that they bring to securities markets. How many ECNs are there? How are they regulated?
10. Consider the Bank Secrecy Act and the Patriot Act. What impact have these pieces of legislation had on markets?
11. In a conventional IPO, identify the process of getting an IPO approved by the securities regulators at both the federal and state levels. What documents are submitted to the SEC?
12. At one time there was a linkage planned between the NYSE and the London Stock Exchange (LSE). What happened to it and why?
13. What are the similarities and differences between the options and futures markets.
14. What is the Reinsurance Market. What economioc function does it perform? Who are the major players in this market?
15. Examine the regulatory structure of the cash equity markerts versus the derivatives markets.