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Course Materials
Assignments
Exams
Grading

BYU Course Outcomes

  1. Understand interest rates, rate determination and discounted present value.
  2. Understand differential spot, forward & derivatives, futures and options markets, with specific application to stocks and US Treasuries.
  3. Understand the function and management of financial intermediaries.
  4. Understand basic aggregate economics: actual and potential supply and actual demand and their implication for growth, employment and inflation.
  5. Understand trade and exchange rates.

Course Objectives

When you have completed this course, you should be able to do the following:

  1. You should be able to watch the actions of the Federal Reserve Board as it influences interest rates and economic activity and understand how the Fed works.
  2. Read and interpret The Wall Street Journal. You may be a more successful business professional if you know how to read and understand The Wall Street Journal (WSJ). Learning to interpret financial news and data are among the most valuable and practical things to prepare to enter the business world.
  3. Explain how financial institutions and financial markets operate.
  4. Interpret the linkages between currency exchange rates, interest rates, economic activity, and domestic and foreign rates of return on financial instruments.

Some money and banking students, especially those who have additional courses in investments and finance, have successfully attained internships with various financial institutions. After graduation, some students have become investment bankers, bank examiners, commercial loan portfolio analysts, investment analysts, bank officers, or have secured a variety of related financial positions. While this course will not make you an expert, you can make yourself a financial expert by continuing to learn whatever you need to know in your chosen area of interest. Most employers want someone who is bright and ambitious and who is a quick learner, not someone who knows everything to begin with. And whether you seek employment in the financial field or not, knowledge of the material in this course will be invaluable whether you become an accountant, a lawyer, a business manager, or the manager of your own household.

Achieving the Course Objectives

You will complete the following tasks and assignments as you seek to attain the following course objectives:

  1. You will learn how to be a Fed watcher by completing a brief project in which you will assess recent Federal Reserve actions with respect to interest rates and then make a short-run forecast of what you think the Fed will do in the future.
  2. You will learn how to apply the concepts by reading the WSJ daily.
  3. You will learn how to monitor financial markets, including the markets for bonds, stocks, foreign bonds, international currencies, and financial derivatives, by building and monitoring a portfolio of financial assets.
  4. You will learn the vocabulary, language, and technical concepts from the textbook and study guide. You will complete a series of assignments based on the assigned reading.

As you can see, this course is not just a textbook course. Rather, it combines necessary information from the textbook with heavy emphasis on reading outside sources to gain understanding of what is going on in the everyday world of financial markets.

Prerequisites

Course Materials

Required Materials

The following are required for this course. These are the same textbooks required for the on-campus Man Ec 453 course. Together these four required materials provide the tools you need for this course. We could not accomplish the course objectives without all of them.

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Assignments

Speedback

For each of the 19 lessons there is a Speedback assignment consisting of multiple-choice questions. Answer these questions according to the material in the textbook and course manual to find the correct answers.

Fed Project

After lesson 19, there are instructions for the Federal Reserve project which requires that you watch the Federal Reserve Board and the Federal Open Market Committee (FOMC) to evaluate the effects of changes in the fed funds rate and to evaluate changes in macroeconomic indicators underlying changes in Fed policy. You will prepare a report on your observations.

Portfolio

After the Fed project are instructions for the investment portfolio, which you will compile as an exercise in becoming familiar with pricing a variety of domestic and foreign investment securities. You will practice monitoring the call and put options and comparing them to their underlying commodities. The exercise is meant to help you gain a greater appreciation and understanding of the interrelationships between commodities and their related options. You should be able to see and record the effect of exchange rates on the returns of foreign securities and calculate a gain or loss for each security and for the entire portfolio. The number of weeks that you use to monitor your portfolio will depend on how long it takes you to complete the course. As a minimum, you should monitor your portfolio and make entries once a week for at least a month. Most students will take several months to complete the course; if you take about three to four months, plan to monitor your portfolio at least every other week selling all of your investments before you turn the assignment in so you can calculate gains and losses. If you take a year or so to finish the course, three or four months is sufficient time to watch your portfolio. However, if you want to keep track of your investments for a longer period, you may do so. You will learn more and have more fun doing it. This is a learning exercise, so do not worry about whether you have everything right to start with. Just keep working at it and continue refining what you know.

Assignment Submission

You will submit your completed assignments to Independent Study electronically throughout your course. To make sure that I can open and read your assignment, please save your Fed Project as an .PDF file. Here’s how to do it:

For your “Portfolio Assignment” please complete the assignment in Excel and save your assignment as described above.

How to Succeed in This Course

Unless you either have some practical background in some field of finance or have taken some academic courses related to financial markets, you will be learning an entirely new language and vocabulary. Additionally, you should recognize that this course focuses on what is happening in the everyday financial world. Thus, by learning the language, vocabulary, and concepts of money and banking, you will be able to better understand the financial markets around you.

The following are some suggestions for increased success in this course:

  1. Learn all of the details thoroughly. This includes definitions, equations, concepts, and descriptive information. If you need to read through each chapter two or three times, doing so will pay off. Pay special attention to the lists of terms and chapter summaries at the end of each chapter and note that a useful glossary of terms and definitions is located at the end of the textbook. Use the study guide frequently as a self-test to see how well you are doing.
  2. Study consistently and on schedule. There is one big pitfall in an Independent Study course. Other than your year’s deadline, all of your deadlines are self-imposed, not specified by your instructor. You can always put off completing the next lesson or taking the next exam. Commit yourself to doing a definite amount of work each week. The material builds upon itself, and long delays between efforts mean that you will forget much of what you learned earlier. Thus, the most effective advice is, set regular days and times to focus on the course.
  3. Don’t rush too quickly through the lessons. Some students try to make the successful completion of the lessons fit their own personal time schedules rather than spend the time needed to do a good job of finishing the lessons. Skim the chapters to gain general ideas and then read carefully to learn the details. I also suggest frequent breaks during study time. Fatigue can prevent you from learning efficiently. Study no longer than forty-five minutes without taking a break. In graduate school we used the “45 minute rule” and experienced more productive study time.
  4. Apply the material. You must apply what you have learned to different situations. For example, as you watch the news, think about the economic implications of the day’s headlines. Also, find someone to which you can teach the concepts. The best way to learn a topic is to teach it.
  5. Read as much as you can each day about what is happening in the world of banking and financial markets. Read everything you can find about banks, the Federal Reserve, inflation, unemployment, gross domestic product, interest rates, the bond market, the stock market, and other similar topics. Engage others in discussions regarding these topics. Since you will not have the opportunity to discuss these topics in a classroom setting, find co-workers, spouses, friends, roommates, etc with whom you can discuss these topics.
  6. Try not to become discouraged if the concepts appear confusing or challenging at first. You are learning about a complex financial world, be patient and do the best you can. If you are missing too many points on your lessons, that should be a clue that you need to review more thoroughly, and take more time with each topic. Keep in mind that solutions to the odd numbered “Review Questions” and “Analytical Problems” which accompany each chapter in the text are found in the back of the textbook beginning on page A-15. Use these questions to practice your topics.

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Exams

There will be one midcourse exam and a cumulative final exam. You will take the midcourse exam after completing lessons 1 through 10, including the accompanying Speedback assignments. You will take the final exam after completing lessons 11 through 19, including the accompanying Speedback assignments, the Fed Project, and the investment portfolio.

The midcourse exam will contain 50 multiple-choice questions and the final exam will contain 100 multiple-choice questions. About one-third of the final exam will be a review of key material from the midcourse exam and the other two-thirds will be on new material covered after the midcourse exam. Exams will contain a variety of questions, including definitions, problems, graphs, and analytical (“if this, then what result”) questions.

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Grading

Your final grade will be determined as follows:

Your final grade will be determined by adding the weighted percentages. Note that for each enrollment in a course you can retake each exam one time only, and you must pay a fee and check with the Independent Study office to do so. Note: students often get a false sense of security when they receive high grades on Speedback assignments and sometimes do not do as well on the exams. The usual reason for this discrepancy is that homework answers can be checked in the text and study guide, but you must rely on your memory when taking the exams. Review the material listed in lesson objectives carefully and thoroughly before taking the exams. You must pass the final exam with a grade of at least 58 percent in order to pass the course, no matter how well you do on the assignments and course projects.

Total percentages translate into grades as follows:

Speedback Assignments (19 lessons at 2% each) 38%
Midcourse Exam 12%
Final Exam 30%
Federal Reserve 10%
Investment Portfolio Project 10%
Total 100%
Grading Scale
A 100 92
A− 91 88
B+ 87 85
B 84 82
B− 81 78
C+ 77 75
C 74 72
C− 71 68
D+ 67 65
D 64 62
D− 61 58
E (fail) 57 0

There are no extra credit projects in this course. You will get the letter grade indicated for any percentage listed above.

Again, remember that you must pass the final exam to pass the course, no matter how well you do on Speedback assignments and the course projects. Doing well on the Speedback assignments and the course projects can help your grade if you are already passing, but you cannot substitute high scores on these two categories for grades below 58 on the final exam.

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Other Useful Sources of Information

Internet Resources That May Be Helpful (Not Required)

If you have access to the Internet, here are some invaluable sources of data and information. I’ve left off the “http://www” introductory address. Some of these sites may require adjustment for your software to access the charting functions they provide. If you’re really curious, go into a finance section and key in words like “bond market” or “interest rates” and you will be inundated with references. For a wide variety of information about financial markets, including changes in the Dow Jones Industrial Average throughout the day, log on to the following web site:

If you have access to the Internet, here are some invaluable sources of data and information. I’ve left off the “http://www” introductory address. Some of these sites may require adjustment for your software to access the charting functions they provide. If you’re really curious, go into a finance section and key in words like “bond market” or “interest rates” and you will be inundated with references. For a wide variety of information about financial markets, including changes in the Dow Jones Industrial Average throughout the day, log on to the following web site:

The following site gives direct access in its menu to a variety of other business periodicals: banxquote.com

This is the site for the Board of Governors of the Federal Reserve Board in Washington, D.C.: federalreserve.gov

The site for the St. Louis Fed contains an abundance of U.S. economic and financial data: research.stlouisfed.org/fred2/

Try the following additional useful sites:

In addition, each of the other regional Federal Reserve Banks has its own site, and there are numerous other sites for foreign central banks and financial markets. After you have familiarized yourself with a few of the sites listed above, you can branch out into other sources of Internet data and information. The Economic Report of the President contains a historical appendix of macroeconomic data current up until about December of the year before each new report is printed in late February. This government document is accessible on the Internet.

The amount of data and information on the Internet is so vast and is changing so rapidly that it is impossible to identify all of the useful sites. You will need to experiment a bit yourself and see what you can find. Students often have trouble finding securities quotes for their portfolio project. Many sites provide quotes on stocks, bonds, options, currencies, and other financial derivatives. This access is particularly useful because securities without any market activity on a given day are often not listed in the financial quotes for that day. You can probably find a site that will enable you to enter your portfolio and monitor it on the Internet. You can also find information about the companies in which you have invested or about the currencies in which you have invested. This information will be invaluable in helping you to write brief summaries about what happened to the markets in which you have investments and to keep track of the economic conditions that influence currency exchange rates and foreign investments.

Other useful sites:

(Note: the Bloomberg site has job listings; other sites have information about salaries and job requirements in finance. Try Investment Banking or Business Job Finder.)

Note: These sites are subject to change and may or may not exist in the future. Additionally some may charge membership fees

A Television Program That May Be Helpful (Not Required)

The television station CNBC offers a continuing update throughout the day of the Dow Jones Industrial Average and other financial data. Commentators provide updates on breaking financial and economic news. Other television programs that are worth watching include C-Span (which occasionally runs various Congressional hearings on the economy, including statements by Fed Chairman Alan Greenspan) and Louis Rukeyser’s Wall Street Week.

Periodicals That May Be Helpful (Not Required)

  1. USA Today contains succinct coverage of major financial and market news together with market quotes.
  2. The financial sections of major newspapers such as The New York Times and The Los Angeles Times are valuable sources of information.
  3. Useful magazines include Business Week, which contains a wide variety of articles on financial markets, banking, and economic conditions; Fortune, which includes commentaries on the economy and on topics such as banking and global finance; and The Economist, a British publication which is probably the best weekly source of articles and information about global financial and economic developments. Take time to familiarize yourself with these publications in your library.

Note: None of these extra sources is required reading, although you will find useful data and other information in them to help prepare your paper on the Federal Reserve (lesson 20) and Investing project (lesson 21). If you do not have a computer and do not have access to one, you will not be at a disadvantage in completing this course. However, if you can get access to a computer, even on an intermittent basis, you will learn much that will be of great value to you about various areas of financial markets.

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Copyright Notice

The materials used in connection with this online course are only for the use of students enrolled in this course for purposes associated with this course and may not be retained or further disseminated. Any copying or further dissemination of these materials may be subject to applicable U.S. Copyright Laws. For questions or more information, please visit the BYU Copyright Licensing Office website.

“Members of the BYU community who willfully disregard this Copyright Policy or the BYU Copyright Guidelines place themselves individually at risk of legal action and may incur personal liability for their conduct. The unauthorized use or distribution of copyrighted material, including unauthorized peer-to-peer file sharing, may subject individuals to civil and criminal liabilities, including actual and statutory damages, costs and fees of litigation, fines, and imprisonment

Violations of the Copyright Policy may result in university disciplinary action including termination of university enrollment or employment.” (Emphasis added. Excerpt taken from the BYU Copyright Policy)

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University Policy - Title IX Statement

Preventing & Responding to Sexual Misconduct

In accordance with Title IX of the Education Amendments of 1972, Brigham Young University prohibits unlawful sex discrimination against any participant in its education programs or activities. The university also prohibits sexual harassment—including sexual violence—committed by or against students, university employees, and visitors to campus. As outlined in university policy, sexual harassment, dating violence, domestic violence, sexual assault, and stalking are considered forms of "Sexual Misconduct" prohibited by the university.

University policy requires all university employees in a teaching, managerial, or supervisory role to report all incidents of Sexual Misconduct that come to their attention in any way, including but not limited to face-to-face conversations, a written class assignment or paper, class discussion, email, text, or social media post. Incidents of Sexual Misconduct should be reported to the Title IX Coordinator at t9coordinator@byu.edu or (801) 422-8692. Reports may also be submitted through EthicsPoint at https://titleix.byu.edu/report or 1-888-238-1062 (24-hours a day).

BYU offers confidential resources for those affected by Sexual Misconduct, including the university’s Victim Advocate, as well as a number of non-confidential resources and services that may be helpful. Additional information about Title IX, the university’s Sexual Misconduct Policy, reporting requirements, and resources can be found at http://titleix.byu.edu or by contacting the university’s Title IX Coordinator.

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Accessibility Notice

BYU is committed to providing a working and learning atmosphere which reasonably accommodates persons with disabilities who are otherwise qualified to participate in BYU's programs and activities. In this spirit, BYU Independent Study aspires to improve web accessibility for users. While not required by law, the Web Content Accessibility Guidelines (WCAG) 2.0 Levels A and AA provide a wide range of helpful recommendations to make Web content more accessible. BYU Independent Study strives to apply WCAG 2.0 recommendations where feasible, but may deviate from any recommendations that would result in an undue hardship to BYU Independent Study or alterations to program and course content and objectives. If you have questions about accessibility, or if you need to report problems with any accessibility features please see our Accessibilities and Accommodations Web Page.

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Course Policies

These policies are specific to this course. For additional information about general policies, please refer to Independent Study Course Policies page.

Assignments

19 computer-graded assignments, may be resubmitted once for a fee; two instructor graded assignments, may be resubmitted once for a fee

Resubmit an assignment for a fee.

Exams

2 proctored computer-graded exams, may retake once for a fee, must pass the final in order to pass the course

Retake an exam for a fee.

Getting Help

Please use the help menu in this course to contact Independent Study or your instructor. You can find a list of free tutors available to BYU Independent Study students on the Free Tutoring Services website.

Note: The Harold B. Lee Library website provides a number of online resources and librarians are available via phone, chat, and email to answer questions about library-related issues.

Inappropriate Use of Course Content

All course materials (e.g., outlines, handouts, syllabi, exams, quizzes, media, lecture content, audio and video recordings, etc.) are proprietary. Students are prohibited from posting or selling any such course materials without the express written permission of BYU Independent Study. To do so is a violation of the Brigham Young University Honor Code.

Copyright © 2016 Brigham Young University. All rights reserved.

Published by the
Department of Independent Study
Division of Continuing Education
Brigham Young University
120 MORC
Provo, Utah 84602-1514
USA