ÿWPC‚  [FŽžË YÌ)˜ØgúºÑ–­?F]ê™ï«c™#<±›vTL öá4¿‚­$9vkèZ—Zˆ†ï§……0-b#\áR:ÎGq¹ŽÔÖ]™s¨ç£NUÈ)¨Õœ± Šgòá©?7ôɢЩÉ3ÿ57,0¡;†-'Û8Óð=Ž•+cYqQ\¯µMÒŠqrÕ°“IçöØB8E_÷^êÑ*º ÷¡rS»džIÓmÿûÅ¡JHk£|µÎi’€—Û4µ†àkˆcjY>˜j¬çAå‰Å®‹pÆ5¢7(Ô,˺kÒ8ZxÍ9Ëç–·"1ÙF-þDG¢¸å()‹ jT þ>÷YÓÓñ:”±¤Ø[Bäš¼À¦ˆA f¡†ˆ/rq¡Š×ISBÀà2‚Q7dŒ[gy‚@Ž X¶ÀÑ ÷ÒkØ•°Õæ=~èÝè?–#ÚÖDû‹yÄï į‹Ñx˜Ã.BË™óÚʯþhEª‰©¿H Ÿ ƒ-¤§m\)7M3úœMŽvÉw¶ ÃÀI£¯š ©Wg\D«ÉCnzc9‰?sºýœ’ :8YÄx-x_#!PU@q %± 0(·HßU0'U<W B “f°a²w@Æ4) m+B 0DXÆœÆbÆ( Æî Æ´ z ˜HP LaserJet 6P/6MP - EnhancedÈÒÈÒÒÈÈÒ0|¸®W  Z(CG Times Regular(($¡¡c:\Corel\Office7\Template\WP7US.WPT2Ͼ¦ `CG Timesô\  `$Times NewRoman dTable_A ÖD×ØÙEÚÛDÜÝEÞßDúƒ'&eskt@ƒ3|xßÿU‹ÿÀÀÀ Ý ƒ¯'ÝÝ  Ý›Dwyer€Finance€4000à0 ¸ àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà0À(#À(#àà0p(#(#àà0Èp(#p(#àà0 È(#È(#àà0x (# (#àà0Ð x(#x(#à€Page€Ú  Ú1Ú  Ú(3¯$§§Ý ƒ!ÝÝ  ÝLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5ƒLevel 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 5 Ý ƒ!ÝÝ  ݛԇ&ØS(((ÔÓ  ÓÖ€ÿÿÖÑ  ÑÔ  ÔÑ  ÑFinance€4000Ð ° ÐMoney€and€Capital€MarketsÌSpring€1999ÌÌÓ  ÓDr.€Gerald€P.€Dwyer,€Jr.à  àà h àà À àà  àà p àà È àà  àOffice€hours:€after€classÐ (x ÐPhone:€€404„614„7095à ¸ àà  àà h àà À àà  àà p àà È àà0  à€€€€and€by€appointmentÔ#†(ØS((&ØS#ÔÔ‡&ØS(((ØSÔÐ V (# (# Ðe„mail:€€dwyerg@clemson.eduà  àà h àà À àà  àà p àà È à€€€€€à0  à€€€Ðä 4 (# (# ÐWeb€page:€under€developmentÌÓ  ÓÌÓ  ÓòòPURPOSE€OF€COURSEóóÐ ~ Î  Ðà  àThe€major€purpose€of€this€course€is€to€provide€you€with€a€sound€knowledge€of€how€financialÏmarkets€and€financial€institutions€work€and€some€knowledge€of€appropriate€responses€to€events€in€thoseÏmarkets€and€institutions.€€Events€in€financial€markets€have€substantial€effects€on€everyone,€whether€aÏperson€works€in€the€financial€industry,€is€attempting€to€finance€a€firmððs€operations,€or€just€managesÏpersonal€funds.€€In€this€course,€you€will€study€financial€markets,€including€how€to€think€about€whatÏhappens€in€them€and€how€to€deal€with€opportunities€and€risks€thrown€up€by€those€markets.€€You€also€willÏlearn€about€financial€institutions,€their€role€in€the€economy,€how€they€operate€and€are€regulated€and€theÏopportunities€and€risks€that€face€those€who€work€in€and€deal€with€those€institutions.€€In€this€course,€we€willÏspend€substantial€time€examining€issues€that€you€will€find€reflected€in€current€articles€in€the€business€press.€ÏSome€of€what€you€will€read€in€the€press€will€be€sensible€and€correct;€some€of€it€will€be€nonsense.€€TheÏprinciples€learned€in€class€will€help€you€tell€the€difference.ÌÌÓ  ÓòòREQUIRED€TEXTóóÐ Ä ÐòòFinancial€Markets€and€InstitutionsóóÐ ¢ò ÐSecond€editionÌFrederic€S.€Mishkin€and€Stanley€G.€¢Eakins£ÌÌÌÓ  ÓòòATTENDANCEÐ øH ÐÓ XÓóóEach€class€period€is€the€same€as€a€usual€week€of€class;€it€would€be€unwise€to€miss€many€classes.Ð Ö& ÐNo€roll€will€be€taken.€€Should€you€miss€many€classes,€you€are€quite€unlikely€to€do€well€and€no€penalty€willÏbe€assessed€beyond€that€direct€one.€€Should€you€have€what€you€believe€to€be€a€medical€problem€or€a€familyÏemergency€that€requires€your€absence,€please€let€me€know€and€I€will€try€to€be€accommodating€to€the€extentÏfeasible.€€One€class€meeting€a€week€puts€a€substantial€burden€on€both€of€us€not€to€miss€òòanyóó€classes€absentÐ N!ž! Ða€òòseriousóó€emergency.Ð ,"|" ÐÐ  #Z# ÐÐ è#8$ ÐÓ XÓòòHOMEWORKÐ Æ$ % ÐÓ XÓóóI€will€not€assign€explicit€homework.€€Still,€I€will€indicate€in€class€things€that€you€would€find€itÐ ¤%ô & Ðuseful€to€do€on€your€own€to€be€sure€that€you€understand€the€material.€€If€you€make€an€attempt€at€doingÏsomething€that€I€have€suggested€and€you€would€like€to€see€me€do€it,€ask€and€I€will.€€If€you€donððt€ask,€IÏwonððt€bore€you€by€doing€it€in€class.Ô#†(ØS((&ØS#ÔÔ‡(Ò(((ØSÔÐ >(Ž#) Ðâ âÐ )l$* ÐÔ& „ Ôâ âÓ XÓòòTESTSÐ V ÐÓ XÓóóThere€will€be€two€midterm€exams€and€one€final€exam.€€The€midterm€exams€will€be€given€onÐ 0Ú ÐFebruary€œñÖñ23ñÖññ×ñ1ñ×ññÞñ6ñÞññßññ×ñ7ñ×ññßñ›€and€April€6.€€The€final€exam€will€be€given€during€the€scheduled€time€for€the€final€exam:€MayÏ6,€3:30„6:30.€€These€dates€are€final,€although€the€material€covered€on€the€exams€will€depend€on€exactlyÏwhat€material€has€been€covered€by€those€dates.ÌThe€final€will€be€comprehensive.€€The€exams€will€include€several€short„answer€(essay)€questionsÏand€possibly€some€multiple„choice€questions.Ì€If€you€expect€to€miss€an€exam,€you€should€notify€me€or€the€Department€Secretary€before€the€examÏor€within€twenty€four€hours€after€the€exam.€€If€your€absence€is€excused,€then€you€may€take€a€makeup.ÌÓ XÓÔ'„VX ÔÌÔ& 0 ÔòòPROJECTóóÐ Ú„  Ðà  àÔ#†(ØS(((Ò #ÔThe€purpose€of€the€term€project€is€to€give€you€the€opportunity€and€the€incentive€to€seriously€readÐ ´^  Ðfinancial€articles€and€apply€what€you€learn€in€class€to€understand€them.€€If€you€think€through€someÏapplications€with€the€relevant€principles€covered€in€this€course,€you€are€far€more€likely€to€be€able€to€useÏthose€principles€after€this€class€is€over.ÌÔ'0ÚÂÔà  àThe€basic€setup€is€to€put€together€a€notebook€consisting€of€comments€applying€principles€from€classÏto€articles€from€the€òòWall€Street€Journalóó€or€other€sources€pertinent€to€this€course.€€The€articles€themselves,Ð  ´  Ðor€readable€copies,€must€be€submitted€along€with€your€comments.€€It€will€be€best€if€you€arrange€the€articlesÏby€topic€and€then€either€analyze€them€individually,€as€a€whole€or€both.€€In€this€way,€you€can€minimizeÏrepetition€of€the€articles€in€your€comments.€€You€may€or€may€not€find€it€useful€to€prepare€graphs€andÏcharts.Ìà  àYou€get€to€(or,€depending€on€your€point€of€view,€have€to)€pick€out€the€topics€yourself.€€I€will€notÏassign€articles€or€topics.€€Pick€out€articles€on€subjects€that€interest€you.Ìà  àThe€general€subject€areas€can€be€gleaned€from€the€reading€list€below€and€more€detail€can€beÏobtained€from€the€more€detailed€subject€listings€in€the€textbookððs€Table€of€Contents.€€Examples€of€pastÏtopics€are:€€whether€stock€prices€are€too€high€or€too€low;€the€likely€course€of€interest€rates€in€the€future;Ïchanges€in€restrictions€on€branch€banking;€€the€effects€of€bank€failures;€and€recent€monetary€policy€andÏits€likely€effects€on€current€and€future€interest€rates.€€The€only€restriction€is€that€topics€must€be€of€someÏgeneral€interest€related€to€this€course.€€An€example€of€an€unsuitable€topic€would€be€the€effects€of€theÏMicrosoft€antitrust€trial€on€the€price€of€Windows€NT.Ìà  àIf€you€are€in€doubt€about€the€suitability€of€a€topic€or€about€your€proposed€analysis€(i.e.,Ïexamination€of€the€details€of€the€article€or€series€of€articles€using€principles€from€class),€feel€free€to€discussÏwith€me€the€topic€and€what€you€intend€to€write.€€This€will€be€most€valuable€when€you€have€a€proposedÏtopic€and€a€tentative€outline€of€what€you€plan€to€write.€€For€obvious€reasons,€I€will€not€pre„grade€a€projectÏor€an€analysis,€but€I€will€be€happy€to€discuss€your€proposed€analysis€and€make€comments.Ìà  àYou€should€regard€this€project€as€equivalent€to€a€term€paper,€not€as€a€require‚ment€that€you€putÏtogether€a€book.€€The€grading€will€be€based€on€what€you€say:€brief€summaries€of€the€articles€may€or€mayÏnot€improve€your€analysis.€€Brevity€is€helpful€to€both€of€us.Ìà  àHow€many€topics€you€have€will€depend€upon€the€topics€chosen€and€how€broadly€you€define€them,Ïbut€two€generally€is€too€few€and€twenty€definitely€is€too€many.€€Very€successful€projects€have€beenÏanalyses€of€single€topics,€such€as€the€effects€of€variable€interest€rate€mortgages,€but€such€an€analysis€mustÏbe€in€substantial€depth€and€should€be€discussed€with€me€in€advance.Ìà  àThere€is€no€specific€requirement€concerning€length,€but€almost€undoubted‚ly€two€double„spacedÏprinted€pages€is€too€few€and€twenty€full€double„spaced€pages€is€too€many.Ìà  àThis€is€an€individual€project,€not€a€joint€one€to€be€done€with€others.€€I€strongly€recommend€thatÏyou€not€leave€this€project€to€the€last€minute.€€The€due€date€is€the€last€day€of€class:€April€17,€1999.€€Do€notÐ 0-Ú&- Ðhand€this€in€late€without€discussing€it€in€advance€with€me.€€Late€papers€are€subject€to€a€penalty€of€oneÏgrade€level€or€more.ÌÔ‡&ØS(((ØSÔÔ‡&Ò((&ØSÔÌÔ& B ÔòòGRADESóóÐ ì– ÐÓ XÓThe€exams€and€the€project€will€determine€your€grade.€€The€project€will€count€for€twenty„fiveÏpercent€of€your€grade.€Each€of€the€mid„term€exams€will€count€for€twenty€percent€of€your€grade€and€theÏfinal€will€count€for€the€remaining€thirty„five€percent€of€your€grade.ÌÓ XÓÔ'BìLÔÌòòÔ& 6 ÔREADINGSÐ . Ø ÐóóÌÔ#†(Ò((&Ò #Ôà  àI€have€listed€what€I€expect€to€cover€each€week.€€You€should€make€a€serious€effort€to€read€or€atР⌠ Ðleast€look€over€the€material€in€advance.€€One€three„hour€class€instead€of€two€or€three€classes€a€week€makesÏit€much€more€important€that€you€have€a€good€overview€of€what€parts€of€the€material€seem€mysterious€toÏyou€before€class.ÌÔ#†(ØS(((Ò,#ÔÔ‡(Ò(((ØSÔÌà  àI€almost€surely€will€deviate€from€this€plan.€€As€in€financial€markets,€expectations€in€reading€listsÏseldom€are€realized€even€though€substantial€thought€and€effort€are€invested€in€estimating€what€is€likely€toÏhappen.€€Each€week,€I€will€tell€you€what€I€expect€to€cover€the€following€week.€€If€I€forget,€I€will€appreciateÏbeing€reminded.ÌÔ‡ôÙùõ((ÒÔÔ#†ôKêõõôÙùŒ"#ÔÔ‡ô¼õõôKêÔÌÔ*qƒ Üddd Xdd Xdd X°(#°(#qÔœÔ,jRRÔÔ,ð RRÔÔ,RRÔÔ+  ÔÐ 9€( Rü €€‚8‚ƒƒ„„‡d‡9ÐÔ#†(Oç(õô¼$#ÔÔ‡&Oç(((OçÔÔ#†&ØS((&OçJ$#ÔÔ‡&Ò((&ØSÔSubjectÔ'6 . µ ÔÐ G€6%Š4d „„‡d‡GÐReadingÐ G€6%Š4d „„‡d‡GÐDateÐ MC+Š4 8 d €€‚(‚ƒƒ„„MÐOverviewÐ 'œF „„'ÐChapters€1€and€2Ð J@œF `©á@36171„„‰`©á@‰JÐJanuary€12Ð ]S;œF `©á@36171 ( `©á@ €€‚(‚ƒƒ„„]ÐUnderstanding€Interest€RatesÐ 'žH „„'ÐChapter€3Ð J@žH @ªá@36178„„‰@ªá@‰JÐJanuary€19Ð ]S;žH @ªá@36178 ( @ªá@ €€‚(‚ƒƒ„„]ÐPortfolio€ChoiceÐ ' J „„'ÐChapter€4Ð J@ J  «á@36185„„‰ «á@‰JÐJanuary€26Ð ]S; J   «á@36185 (  «á@ €€‚(‚ƒƒ„„]ÐThe€Behavior€of€Interest€RatesÐ '¢L! „„'ÐChapter€5Ð H>¢L" ȇ@761„„‰È‡@‰HÐFebruary€2€Ð [Q9¢L# ȇ@761 ( ȇ@ €€‚(‚ƒƒ„„[ÐRisk€and€Interest€RatesÐ '¤N$ „„'ÐChapter€6Ð J@¤N% à¬á@36199„„‰à¬á@‰JÐFebruary€9Ð ]S;¤N& à¬á@36199 ( à¬á@ €€‚(‚ƒƒ„„]ÐñØñReview€and€ExamñØññÛñEfficient€Asset€MarketsñÛñÐ '¦P' „„'ÐñÝñChapter€7ñÝñÐ J@¦P( À­á@36206„„‰À­á@‰JÐFebruary€16Ð ]S;¦P) À­á@36206 ( À­á@ €€‚(‚ƒƒ„„]ÐñÙñReview€and€examñÙññÚñEfficient€Asset€MarketsñÚñÐ '¨R* „„'ÐñÜñChapter€7ñÜñÐ J@¨R+  ®á@36213„„‰ ®á@‰JÐFebruary€23Ð ]S;¨R,  ®á@36213 (  ®á@ €€‚(‚ƒƒ„„]ÐForeign€Exchange,€Money€and€Capital€MarketsÐ 'ªT- „„'ÐChapters€8,€9€and€10Ð J@ªT. €¯á@36220„„‰€¯á@‰JÐMarch€2Ð ]S;ªT/ €¯á@36220 ( €¯á@ €€‚(‚ƒƒ„„]ÐÔ#†&ØS((&ÒÕ%#ÔÔ‡&Ò((&ØSÔÔ#†(Ò((&Ò“%#ÔÔ‡&Ò(((ÒÔSpring€BreakÐ '¬ V0 „„'ÐÐ J@¬ V1 `°á@36227„„‰`°á@‰JÐMarch€9Ð ]S;¬ V2 `°á@36227 ( `°á@ €€‚(‚ƒƒ„„]ÐFinancial€Contracts€and€Financial€IntermediariesÔ#†(Ò((&Ò‹/#ÔÔ‡&Ò(((ÒÔÔ#†&ØS((&ÒI/#ÔÔ‡&Ò((&ØSÔÐ '®!X3 „„'ÐChapter€12Ô#†&ØS((&Ò 1#ÔÔ‡&Ò((&ØSÔÔ#†(Ò((&ÒÞ0#ÔÔ‡&Ò(((ÒÔÐ J@®!X4 @±á@36234„„‰@±á@‰JÐMarch€16Ð ]S;®!X5 @±á@36234 ( @±á@ €€‚(‚ƒƒ„„]ÐBanking€and€Bank€RegulationÐ '°"Z6 „„'ÐChapters€13€and€14Ð J@°"Z7  ²á@36241„„‰ ²á@‰JÐMarch€23Ð ]S;°"Z8  ²á@36241 (  ²á@ €€‚(‚ƒƒ„„]ÐMore€on€Banking€and€Bank€RegulationÐ '²#\9 „„'ÐChapters€15€and€16Ð J@²#\: ³á@36248„„‰³á@‰JÐMarch€30Ð ]S;²#\; ³á@36248 ( ³á@ €€‚(‚ƒƒ„„]ÐReview€and€Second€ExamÐ '´$^< „„'ÐÐ J@´$^= à³á@36255„„‰à³á@‰JÐApril€6Ð XN;´$^> à³á@36255 ( à³á@ ‚(‚ƒƒ„„XÐOther€Financial€IntermediariesÔ#†&ØS((&Ò“1#ÔÔ‡&Ò((&ØSÔÔ#†(Ò((&ÒÕ1#ÔÔ‡&Ò(((ÒÔÐ '¶%`? „„'ÐChapters€17,€18€and€19Ô#†&ØS((&ÒÏ5#ÔÔ‡&Ò((&ØSÔÔ#†(Ò((&Ò6#ÔÔ‡&Ò(((ÒÔÐ J@¶%`@ À´á@36262„„‰À´á@‰JÐApril€13Ð XN;¶%`A À´á@36262 ( À´á@ ‚(‚ƒƒ„„XÐRisk€Management€and€Hedging€Ð '¸&b B „„'ÐChapters€20€and€21Ð J@¸&b C  µá@36269„„‰ µá@‰JÐApril€20Ð XN;¸&b D  µá@36269 (  µá@ ‚(‚ƒƒ„„XÐHedging€Ð 'º'd!E „„'ÐChapter€22Ð J@º'd!F €¶á@36276„„‰€¶á@‰JÐApril€27Ð d€S;º'd!G €¶á@36276 ( €¶á@ €€‚(‚ƒƒ„„dÐFinal€examÐ ;€*¼(f"H „„;ÐÐ ^€M¼(f"I  ·á@36285„„‰ ·á@‰^ÐMay€6ÐXNL¼(f"J  ·á@36285 (   ·á@ XÐÌÔ#†&ØS((&Ò6#ÔÔ#†(ØS((&ØSÒ6#Ô