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FIN 330- Financial Markets and Institutions- Spring 2010
Instructor: Shoba Premkumar Sec. D: Gerdin 2118 MWF 10-10.50 am
Office: 3239 Gerdin Sec. E: Gerdin 2118 MWF 11 – 11.50am
Phone: 294-7379 Sec, F: Gerdin 2118 MWF 12.10- 1 pm
Prerequisites: Fin301 Email: shobha@iastate.edu
Office hours: Tuesday- 10.30 am to noon
Textbook: :Jeff Madura – 8th edition - Financial Markets and Institutions
Required Accessories: Financial Calculator – TI BA II+
Learning Outcomes:
To introduce major types of U.S. financial markets and financial institutions
To understand the key types of financial assets, the current structure of financial
markets and the financial services industry.
To understand interest rates and the key role that they play in financial markets and for
financial institutions.
To develop oral communication skills via class participation, and financial institution
presentation.
To further develop inter-personal skills by working in teams projects.
Grading:
Exam 1 20%
Exam 2 20%
Exam 3 20%
Presentations 20%
Team work/Quizzes 20%
Peer evaluation: Grade would depend on peer evaluation of your contribution to group work
Responsibilities of the student:
Students are expected to read the chapters related to each class and come well prepared for
class. Lectures will focus on major points outlined in the chapter.
Lecture notes would be posted on the course website. Additional materials could be
incorporated during lectures, which may or may not be included in the slides.
Bring your calculator to each class as we will be working out problems
Full class participation during class and presentations is expected from each student
We will have quizzes on days you have presentations on financial institutions. Students need
to provide a hardcopy of the presentation with two slides per page and also email the
presentation anytime before the presentation begins. Include your financial institution and
section as subject of the email
There will not be any make up for missed exams, except in rare instances where VALID
reasons are provided prior to the quiz/exam.
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Students with disabilities needing specific accommodations for the class should make
this known to the instructor
Tentative Schedule
Date Topic Chapters Presentations
Jan Role of Financial Markets 1
11,13,15 and Institutions
18 Holiday
20,22,25 Determination of Interest 2&3
rates
27,29, feb 1 Structure of interest rates 3
Money markets 6
Feb 3 Presentation Citi Group
5 Presentation Wells Fargo
8 Presentation Ameritrade
10 Exam Review
12 Exam 1
15,17,19 Bonds 7 &8
22,24,26 Mortgages 9
March 1 Presentation Freddie Mac
3 Presentation AIG
5 Presentation Principal Financial
Group
8 Presentation JP Morgan
10 Exam Review
12 Exam 2
15- 19 Spring Break
22,24,26 Stock Market 10
29,31 April 2 Options Market 14
April, 5 Finance Companies 22
7,9,12,14 Mutual Funds 23
16 Presentation Black Rock
19 Presentation American Express
21 Presentation Goldman Sachs
23 TBA
26,28 Exam Review
Finals TBA
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Finance 330 – Guidelines for Presentations
Each team will research one financial institution throughout the semester and will have one
presentation during the last week. The presentation should take approximately 25 minutes. All team
members must participate in the presentation.
Financial Institutions
The following financial institutions are assigned to teams:
Team 1 – Citi Group
Team 2 – Wells Fargo
Team 3- Ameritrade
Team 4 – Freddie Mac
Team 5 – AIG
Team 6- Principal Financial Group
Team 7- JP Morgan
Team 8 - Black Rock
Team 9 – American Express
Team 10- Goldman Sachs
Teams need to track the stock performance of financial institution every day and the presentation
should include information on all recent company/industry specific events that might impact the
financial institution. The presentation should address the following areas:
Profile and Business Mix
:
Company background
Information on top management
In what businesses does the firm compete?
Which business segments are its largest?
Which business segments are growing the fastest?
Is the firm a market leader in any of its business segments?
What geographic areas does the firm principally serve?
Financial Performance:
How large is the firm in terms of market capitalization and sales revenue?
What was its net income and net operating income for the most recent year?
What was its ROA? ROE? EPS? DPS? PM?
How does its financial performance compare to its industry or to representative competitors?
What about its debt ratio?
Is there any information on company specific risk or market risk as measured by beta?
Does it have adequate cash on hand?
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Market Performance and Ownership:
What is its current market capitalization?
What have been its stock price trends over the past 12 months in comparison to the S&P 500?
YTD? Over the past five years (or its life as a public company, if shorter)?
What is the current P/E ratio for the common stock?
How much is owned by institutions? Insiders?
What are analysts forecasting for the firm in the future? Specifically what would be the
earnings and growth estimates for the next few years
Competitor analysis
Who are the major competitors?
How do they compare with competition in terms of market capitalization, revenues, net
income, PE, and revenue growth?
Does it have any sustainable competitive edge?
Recent developments:
Has this company made any recent public announcement that would significantly enhance
stock holder value?
How has this institution been affected by the sub prime mortgage lending crisis?
Is there any recent acquisition?
Has it expanded its operations recently or introduced any new product/services?
Grading
A one page summary and a list of references must be provided to the instructor at the time of the
presentation. The presentation should be well organized and include a good introduction, effective
analysis and interpretation of financial information, good transitions, recent developments and a good
summarizing conclusion. The grading scale would be based on the following criteria:
Introduction
Analysis and interpretation
Accuracy
Completeness
Quality
Communication skills
Conclusion
Information Sources
Visit Yahoo finance which is a comprehensive finance website that contains all the information
needed for successfully completing your research and presentation. For additional information visit
smartmoney.com, Forbes, and business week online. The web page of the financial institution would
also contain a wealth of information.
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