Syllabus
 Description and Goals
 Exams
 Quizzes
 News Reviews
 Attendance
 Grading
 Contacting Me
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Syllabus

DATE	Chapters	Topics
Aug 18	1, 1A  2	Introduction and overview  Overview of the Financial System
Aug 25	3	Money
Sept 1	4  5	Interest rates  The theory of asset demand
Sept  8	6,6A  7	How markets set interest rates  Risk structures and term structures of interest rates
Sept 15	1-7	FIRST EXAM
Sept 22	9	The importance of asymmetric information
Sept 29	11  12	Basics of bank operations  Bank Regulation
Oct   6	15	The structure of the Federal Reserve System
Oct 13	9, 11,  12, 15	SECOND EXAM
Oct 20	16  17	The money supply process  Determinants of the money supply
Oct 27	18  19	Tools of monetary policy  Goals and targets of monetary policy
Nov  3	21	The demand for money
Nov 10	16-19,  21	THIRD EXAM
Nov 17	24	Aggregate demand/aggregate supply analysis
Nov 24	25  26	Evidence on the effects of money on the economy  Inflation and the money supply
Dec   1	27	Rational expectations theory
Dec   8		FINAL EXAM

TEXT:  Mishkin, Frederic S. The Economics of Money, Banking, and Financial Markets, 5th edition Harper-Collins 1998

 OFFICE HOURS:  MWF  10:00 to 11:00,  TR 11:00 to 12:00
other times by prior arrangement.
Office: Rm 121-C Business Admin. Bldg.,
Phone: 521-6592 (office), 738-1946 (home)
E-Mail: frederick@sassette.uncp.edu

 COURSE DESCRIPTION:
Study of financial institutions and their role in the economy.  Analysis includes the Keynesian macroeconomic model and effects of money and credit on national income, prices, and interest rates.

 GOALS:  This course has several goals.  When you have completed this course you should
 •  be familiar with a wide variety of investment instruments, how they are traded, and how interest is calculated and paid on them.
 •  be able to calculate the rate of return on simple investments and decide which of several such investments is best.
 •  be familiar with the theories of how interest rates are determined, and to use these theories to predict how interest rates will change in response to changes in the economy.
 •  be familiar with the types of financial institutions in our economic system, and how and why they are regulated.
 •   be aware of the trends in the recent changes in the regulation of financial institutions, and of the issues and public concerns involved.
 •   know what money is, the ways it is measured, and how it is created.
 •   understand how the quantity of money is controlled in a modern economy, and predict how changes in the quantity of money affect businesses and consumers.

 QUIZZES (*):  There will be 12 readings quizzes during the course.  These will usually test vocabulary or simple concepts.  The main purpose is to encourage you to keep current with the material and to prepare for the discussion by reading the chapters prior to class.  There will be no make-up quizzes, but four of the quizzes will be dropped.  Each quiz will be worth 12 points.  Your overall quiz score will be the sum of your eight best quiz scores plus 4 points.

 EXAMS:  Counting the Final Exam, there will be four exams during the course.  The exams will be multiple choice.  The Final Exam will be comprehensive and it will have the same weight as the other exams.  There will be no make-ups for the first three exams, but one of these exams may be dropped.  (See the formula for computing the average, below.)  Make-up exams for the final exam will be allowed in documented cases of illness, death in your immediate family, or work conflict.  If you do not notify me by December 10, 1999, that you will need to make up the final exam, I will have no choice but to give you a zero for the final exam.  The make-up final exam may be multiple choice or entirely essay, at my discretion.

NEWS REVIEWS:  You will be expected to submit eight news reviews during this course.  The reviews will be due on the Fridays indicated.  The purpose of these reviews is to prod you to be aware of the events that are occurring in the financial markets.  We may discuss events in class as they are reported or when the reviews are turned in.  Each review must be based on an article which
  • is at least 60 lines long (at about 35 to 40 characters per line),
  • appeared in the Wall Street Journal or on www.cnnfn.com,
  • appeared between the date due and the Monday 11 days before that date,
  • relates to a topic in the course and offers a good level of insight, analysis or depth.

In the Wall Street Journal, good articles for our purposes are usually found on page A2 (the Economy) or in Section C, but they may be anywhere in the paper.  On www.cnnfn.com, a good place to look is under economy or world business or special reports.  Examples of good topics are changes banking laws, problems with banking laws, the way the Federal Reserve System conducts monetary policy, the effect of changes in the money supply on unemployment, the GDP, business profits, or the federal debt.  Other good topics deal with how events in the financial markets affect business or household decisions, the effect of competition and mergers in the financial industry on bank profits and the difference between the interest rates that consumers pay and the interest rates that consumers receive.  Examples of bad articles are the common articles that report that interest rates, the Dow-Jones Industrial Average, the value of the dollar, etc., rose or fell with no more than a single line of explanation.  (For example, "Stock prices fell yesterday on interest rate fears." or "The dollar strengthened yesterday as the yen fell." or "Technology stocks pushed the Dow to record heights again on Tuesday.")  Likewise, the dividend reports usually do not give much analysis.

(about ½ to one page,  12 point, double spaced).  Be explicit.  For example, you might say "This article relates to the discussion in Chapter 19 of the Federal Reserve System's use of intermediate targets to guide monetary policy.  It showed that scrap metal prices ...."

(Was it neatly typed?  Were proper spelling and grammar used?  Was the photocopy or printout included?)

 CHEATING:  Cheating on an exam or a quiz may lead to an grade of F for the course.  Note that the Student handbook considers allowing someone to copy from your work as a form of cheating.

GRADING:  Your grade for the course will be determined by a weighted average of eight things: your three best in-class exam scores, your final exam score, the sum of your ten best quiz scores, and your three homework exercise scores.  The weights are as follows:
  In-class exam* 20%
  In-class exam* 20%
  In-class exam* 20%
  Final exam 20%
  Quiz total* 20%
  News Reviews* 20%

*The lowest of these five scores will be dropped before computing the average.  The final exam score will not be dropped.

Letter grades will be assigned according to the weighted average on the following scale: