Students

ECON350 – Money and Finance

2016 – S1 Evening

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Sean Turnell
sean.turnell@mq.edu.au
Contact via sean.turnell@mq.edu.au
E4A 426
Available on iLearn
Credit points Credit points
3
Prerequisites Prerequisites
6cp at 200 level including (ECON200 or ECON201 or ECON203 or ECON204)
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit provides a review and analysis of the role and characteristics of financial markets, institutions, and the instruments they trade. The workings of the Australian financial system are explored, but the unit is also very global in focus. Money and finance are examined both in terms of theoretical foundations and in practical application, and there is a strong preference for the use of history as a vehicle for providing perspective and insight. Topics include: the meaning and nature of money; techniques of selling and pricing securities; rational expectations; efficient markets; the innovations of behavioural finance; arbitrage and speculation; and in-depth analyses of the functions and features of money markets, bond markets, equity markets and the actions and presumptions of monetary authorities. The central theme of the unit is that innovation in money and finance has been as important as innovation anywhere else in shaping the modern world.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

On successful completion of this unit, you will be able to:

  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Demonstrate a capacity to work independently including the ability to plan and achieve goals.
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Assessment Tasks

Name Weighting Due
Review Exercise 20% 4 pm Wednesday 6 April.
Class Test 20% Week 9
Final Examination 60% University Examination Period

Review Exercise

Due: 4 pm Wednesday 6 April.
Weighting: 20%

Write a 1600 word summary and evaluation of the article below. A "review essay" is a summary of your own words of the article, together with an appraisal of it. Your review essay should be about 60% summary and 40% appraisal. Summary means you summarize the main points and explain the chosen article in your own words. Figures, tables, or equations in the article may not be included in your essay. Appraisal means you express your thoughts about the article. For example, whether the article is full of insightful remarks, whether the article gives adequate consideration/analysis of the main issues, or if the article covers too much or too little ground, any additional aspects should be included in the article.

Submission

The Review Exercise must be submitted in the relevant box in BESS by 4pm on Wednesday, 6 April.     .

Before the due date and time assignments must also be submitted through 'Turnitin'. Assignments not submitted through this programme will receive zero marks.

Extension

Genuine and documented cases of illness and misadventure may allow for an extension of the due date, but no other circumstances will allow for this. 

Penalties

Severe penalties will apply for cases of plagiarism, up to and including exclusion from the unit. 

Penalties will also apply for late submission of the Review Exercise. Such penalties will include the loss of 2 marks (out of the 20 awarded for the exercise) for any assignment submitted after 4.00pm on Wednesday, 6 April, and then 2 marks further for each day beyond the submission date after that.

The Article:

1. Dave, S., Shirvaikar, A., and G. Baxter (2016), Releasing the Flow of Digital Money: Hitting the Tipping Point of Adoption, Imperial College, London, and Citigroup.. This paper is available online at:

https://citi.com/icg/sa/digital_symposium/digital_money_2016/pdf/releasing_the_flow_of_digital_money.pdf
On successful completion you will be able to:
  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Demonstrate a capacity to work independently including the ability to plan and achieve goals.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Class Test

Due: Week 9
Weighting: 20%

In week 9 there will be a Class Test for all students in Econ 350.

The test will take place in lectures and, as such, you are required to attend the Test according to the lecture stream in which you are enrolled. The tests for both streams (ie, day and evening) cover the same material, but the questions are completely different. There will be no advantages to anyone having access to the questions asked in the other stream, or even from discussing these with other students (as you will see).

Normal examination conditions will apply of course, and you must bring with you your official University ID card.
On successful completion you will be able to:
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.

Final Examination

Due: University Examination Period
Weighting: 60%

The final examination will consist of true/false and essay-type questions. Further details relating to the number of questions and so on will be given closer to the Exam.  

This two hour final exam will be held during the University Examination period.

You are expected to present yourself for examination at the time and place designated in the University Examination Timetable. The timetable will be available in Draft form approximately eight weeks before the commencement of the examinations and in Final form approximately four weeks before the commencement of the examinations: http://www.exams.mq.edu.au/

The only exception to not sitting an examination at the designated time is because of documented illness or unavoidable disruption. In these circumstances you may consider applying for Disruption to Studies (See the Policies and Procedure section for details). If a Supplementary Examination is granted as a result of the Disruption to Studies process, the examination will be scheduled after the conclusion of the official examination period.

You are advised that it is Macquarie University policy not to set early examinations for individuals or groups of students. All students are expected to ensure that they are available until the end of the teaching semester, the final day of the official examination period.

In the unlikely event of documented illness or misadventure a supplementary exam may be awarded. Such an exam would consist of essay-type questions only.
On successful completion you will be able to:
  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.

Delivery and Resources

Classes 

Students attend three classroom hours per week (in one block), comprising lectures using a mix of theory and practical applications, delivered in First Semester, and in both day and evening sessions.

Of course, you only have to attend one of these sessions! Timing and location of the Econ 350 Lecture Programme can be found at:

https://timetables.mq.edu.au/2016/

Students are expected to attend the full quota of lectures; all the material covered in class is examinable.

It is my expectation that the lectures of Econ 350 will be recorded on the University’s i-Lecture facility. This can be found at: http://ilearn.mq.edu.au

Because of the timing of Easter (Good Friday) there will be NO lectures in week 6, and because of other factors, there will also be no lecture in week 10. Material from these weeks will be simply spread across the other weeks.

Prizes

The best performing student in Econ 350 is honoured with the ‘Australian Finance Conference Prize for Money and Finance’. It is open to all students proceeding to a Bachelor’s degree, and is bestowed at the Faculty’s prize evening later in the year. 

Required and Recommended Texts and/or Materials

There is no set textbook for Econ 350.

A very useful book for this course (as it is for the ‘sister unit’, Econ 335, The Economics of Financial Institutions) is Kidwell, D. et al. 2012, Financial Markets, Institutions and Money (11th edn), John Wiley & Sons, Milton, Qld. 

Also useful for this course is Niall Ferguson’s ‘The Ascent of Money’, which was published in late 2008 by Allen Lane (Penguin), London. This book provides an overview of the history of money and finance – indeed, its subtitle is ‘A Financial History of the World’. What makes this different to most books recommended for courses such as this is that it is also great fun to read – full of drama, violence, scandal, passion, crime, and so on – in short, all the things that really drive money and finance. It takes its story all the way up to mid-2008. A television series on the book was also made in 2008, and broadcast on the ABC (and it is available on DVD). Also, there is an interview with Ferguson about the book on the web. This interview (‘Afterwords: Niall Ferguson author of ‘The Ascent of Money: A Financial History of the World” interviewed by Adrian Woolridge, Washington bureau chief for The Economist’) appeared on the US public broadcaster ‘C-SPAN’ (on November 17, 2008). To find it, simply go to the C-Span website (www.c-span.org) and type in the title above (or, of course, use Google).

At the more ‘technical’ level, some other ‘standard’ finance textbooks are quite good. Including:

Hunt, B. and Terry, C. 2015, Financial Institutions and Markets, 7th edn, Thomson, Melbourne.

Technology Used and Required

iLearn; i-Lecture

Learning and Teaching Activities

As noted above, this unit is taught via three hours of lectures per week. In terms of student activity in relation to this, it is suggested that lecture slides and/or any readings be read in advance. Meanwhile, keeping up to speed on events impacting financial institutions and markets will be highly advantageous.

Unit Schedule

Lecture Topics

Topic 1: Introduction

Kidwell, Ch.1; Hunt and Terry, Ch.1, Ferguson, introduction.

Topic 2: The Evolution of Money in Theory and Practice 

Ferguson, passim;

Davies, Glyn, 1994 & 2002, A History of Money, University of Wales;

Press, Cardiff. There are significant web resources for this book. These can be found at:http://projects.exeter.ac.uk/RDavies/arian/llyfr.html

The following web resource, ‘Alexander Hamilton on the Web’, may be of interest: http://www.isidore-of-seville.com/hamilton/

Also of potential interest is an interview with Ron Chernow

(biographer of Alexander Hamilton above) At the Hoover Institution, Stanford University, on ‘YouTube’: http://www.youtube.com/watch?v=mAoqMjUlinY

And another on C-Span at: http://www.c-spanvideo.org/program/182317-3

Topic 3: Interest Rates: Their Theory and Structure

Kidwell, Ch.4, Ch. 6;

Topic 4: Central Banking and Monetary Policy

Kidwell, Ch.2, Ch.3

Hunt and Terry

RBA Website, www.rba.gov.au

Topic 5: Money Markets

Kidwell, Ch.7

Hunt and Terry

Topic 6: Bond Markets

Kidwell, Ch.5, Ch.8;

Ferguson, Ch.2;

Hunt and Terry.

Topic 7: Equity Markets

Kidwell, Ch.9;

Ferguson, Ch.3;

Hunt and Terry.

Topic 8: Derivatives and Options Markets

Kidwell, Ch.10

Ferguson, Ch.5

See also C-Span video on Futures:

http://www.booktv.org/Watch/12203/The+Futures+The+Rise+of+the+Speculator+and+the+Origins+of+the+Worlds+Biggest+Markets.aspx

Topic 9: The Efficient Markets Hypothesis and its Critics

Kidwell, Ch.1

Valentine, pp.245-251

Topic 10: Behavioural Finance

Ferguson, Ch.3, Ch.6

And:http://www.behaviouralfinance.net/

Topic 11: The Zeitgeist - Crypto-Currencies, Crime and Terror

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:

Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html

New Assessment Policy in effect from Session 2 2016 http://mq.edu.au/policy/docs/assessment/policy_2016.html. For more information visit http://students.mq.edu.au/events/2016/07/19/new_assessment_policy_in_place_from_session_2/

Assessment Policy prior to Session 2 2016 http://mq.edu.au/policy/docs/assessment/policy.html

Grading Policy prior to Session 2 2016 http://mq.edu.au/policy/docs/grading/policy.html

Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html

Complaint Management Procedure for Students and Members of the Public http://www.mq.edu.au/policy/docs/complaint_management/procedure.html​

Disruption to Studies Policy http://www.mq.edu.au/policy/docs/disruption_studies/policy.html The Disruption to Studies Policy is effective from March 3 2014 and replaces the Special Consideration Policy.

In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/

Results

Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.

Student Services and Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

Student Enquiries

For all student enquiries, visit Student Connect at ask.mq.edu.au

IT Help

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/. 

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Graduate Capabilities

Discipline Specific Knowledge and Skills

Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.

This graduate capability is supported by:

Learning outcomes

  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Demonstrate a capacity to work independently including the ability to plan and achieve goals.
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Assessment tasks

  • Review Exercise
  • Class Test
  • Final Examination

Critical, Analytical and Integrative Thinking

We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.

This graduate capability is supported by:

Learning outcomes

  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Demonstrate a capacity to work independently including the ability to plan and achieve goals.
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Assessment tasks

  • Review Exercise
  • Class Test
  • Final Examination

Problem Solving and Research Capability

Our graduates should be capable of researching; of analysing, and interpreting and assessing data and information in various forms; of drawing connections across fields of knowledge; and they should be able to relate their knowledge to complex situations at work or in the world, in order to diagnose and solve problems. We want them to have the confidence to take the initiative in doing so, within an awareness of their own limitations.

This graduate capability is supported by:

Learning outcomes

  • Be open to new (and old!) ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning.
  • Demonstrate a capacity to work independently including the ability to plan and achieve goals.
  • Identify, define and analyse problems and recommend creative solutions within real-world constraints.
  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Assessment tasks

  • Review Exercise
  • Final Examination

Effective Communication

We want to develop in our students the ability to communicate and convey their views in forms effective with different audiences. We want our graduates to take with them the capability to read, listen, question, gather and evaluate information resources in a variety of formats, assess, write clearly, speak effectively, and to use visual communication and communication technologies as appropriate.

This graduate capability is supported by:

Learning outcomes

  • Evaluate underlying theories, concepts,assumptions, limitations and arguments in disciplinary and cross-disciplinary fields of study.
  • Be intellectually ready to participate in public policy discussions arising in social, business and policy environments.

Assessment tasks

  • Review Exercise
  • Final Examination

Research and Practice

This unit makes extensive use of Macquarie University researchers, as can be seen from the reading guide, lecture slides, and elsewhere.