AHSANULLAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

School of Business: 4th Year 1st Semester (Finance Major)

BBA 533: Financial Markets and Institutions

Course Objective: The purpose of this course is to focus on financial institutions that include
banks, savings & loans and credit unions. This course also devotes to explain how the key
financial institutions manage their assets and liabilities, how innovative instruments support
that management, and how they operate in financial markets.

Course Outline
1. Introduction: Financial assets, Financial Markets, Globalization of financial markets,
Classification of global financial markets, Derivative markets.
2. Financial Intermediaries and Financial Innovation: Services of financial institutions, Role
of financial intermediaries, Assets/liability management, Nature of liabilities of financial
institutions, Categories of financial innovation, Assets securitization.
3. Depository Institutions: Activities and Characteristics: Asset/liability problem of
depository institutions: interest rate risk, liquidity concerns, Bank services, Bank
funding, Bank regulation, Savings and loan associations.
4. Investment Companies: Types of investment companies, Structure and expenses of a
fund, Economic motivation for funds, regulation of funds, Commercial banks and mutual
funds.
5. Pension Funds: Introduction to pension funds, Types of pension plans, Investments,
Regulation, Managers of pension funds.
6. Properties and Pricing of Financial Assets: Properties of financial assets, Principles of
pricing financial assets, Appropriate discount rate, Price and asset properties, Regulation
of asset price with asset properties, Price volatility of financial assets, Duration.
7. Primary Markets: Traditional process for issuing new securities, Functions of investment
bankers, Public sale of new securities, Investment banking firms, Variations in the
underwriting process, Private placement of securities.
8. Secondary Market: Functions of secondary market, Trading locations, Market structures,
Perfect markets, Role of brokers and dealers in real markets, Market efficiency.

Text Book:
Fabozzi, Frank J., Modigliani, Franko, & Ferri, Michael G., 1994 Foundations of
Financial Markets and Institutions, Second Edition. Prentice Hall, New Jersey

Reference:
Madura, Jeff, Financial Markets and Institutions
Johnson, Hazel J., 1993 Financial Institutions and Markets, A Global Perspective,
McGraw-Hill, Inc., New York,