Department of Economics & International Development, Unit Catalogue 2008/09
EC20014 Money and finance
| Credits: 6 |
| Semester: 1|
|Assessment: EX 100%|
|Before taking this unit you must take EC10007 or take EC10160|
* To provide an introduction to financial markets and their operation;
* To understand the pricing of financial instruments;
* To enable students to understand the links between financial markets and the real economy;
* To demonstrate linkages between economic policy and financial markets.
At the end of the unit, students should be able to:
* analyse the roles of financial markets and financial intermediaries;
* explain how the pricing of financial instruments takes place;
* understand the link between financial markets and economic policy.
Use and analysis of economic data; problem-solving; understanding of financial and monetary theory expressed in written form through an examination.
Financial decision making with risky assets; portfolio diversification; introduction to the CAPM model; interest rate determination; overview of the operation of money markets and how money market instruments are priced; introduction to bond markets; the term structure of interest rates; introduction to derivative markets - futures, options, swaps. Essential reading: Howells, P and Bain, K. (2005), The Economics of Money, Banking and Finance, FT Prentice Hall; Mishkin, F. S. (2004), The Economics of Money, Banking and Financial Markets, Pearson, Addison-Wesley.