This course will begin by analysing the theory and practice of financial intermediation, broadly construed to include banks, savings institutions and investment/merchant banks. Topics include the role of banking firms in a developed capital market, their impact on corporate financial decisions for nonbanking firms, regulatory efforts and market discipline, and securitization - pros and cons. Focus then shifts to analysis of fixed-income securities. This course provides an analytical framework for valuing fixed income securities. We discuss the institutional structure of the fixed income markets and the role they play in portfolio management. Models are developed dealing with interest rate risk.

Assessment in the course is based on a major project, mid-semester examination and final examination.

At least three contact hours per week.

FINM1001 Money Markets and Finance