- Class Number 2451
- Term Code 2930
- Class Info
- Unit Value 6 units
- Mode of Delivery In Person
- Dr Jozef Drienko
- Dr Jozef Drienko
- Class Dates
- Class Start Date 25/02/2019
- Class End Date 31/05/2019
- Census Date 31/03/2019
- Last Date to Enrol 04/03/2019
Foundations of Finance is designed to familiarise students with the components of the financial system as well as to introduce them to the three basic ideas underpinning finance, namely the time value of money, diversification and arbitrage. In doing so, the course provides students with introductory exposure to financial transactions, institutions and markets including debt, equity, foreign exchange and derivative markets and the instruments traded therein. It also provides students with a solid foundation for later studies in finance.
Upon successful completion, students will have the knowledge and skills to:
- Understand financial transactions, institutions and markets, including money markets, stock markets, foreign exchange, derivatives markets and contracts.
- Understand the ideas behind the time value of money and be able to calculate the value of cash flows relating to a number of financial instruments.
- Understand the concept of diversification, including the risk and return relationship and have the ability to calculate optimal weights for a portfolio comprising of two financial assets.
- Understand concepts of arbitrage, and utilise derivatives for risk management purposes.
Students undertaking this course will be taught fundamental skills in Finance that will be applied to real life applications. Students will also be shown how these techniques are applied to research today.
Additional Course Costs
The only additional course costs are a non-programmable scientific calculator (not a financial calculator!) and printing materials.
Examination Material or equipment
The only permitted materials in the examination are a calculator (scientific, non-programmable and not a financial calculator), dictionary (which will be checked at the examination), pen and a ruler.
No required textbook.
Titman, S., Martin, T., Keown, A., and, J. Martin, Financial Management: Principles and Applications, 7th Edition, Pearson Education, 2016.
Note that the textbook readings from this recommended resource are optional.
Students will be given feedback in the following forms in this course:
- Written and verbal feedback will be addressed to:
- the whole class; and
- to individuals.
ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.
Information Regarding Assessment
Any student identified, either during the current semester or in retrospect, as having used ghost writing services will be investigated under the University’s Academic Misconduct Rule.
It is preferable to contact the lecturer via email.
If necessary, the lecturers and tutors for this course will contact students on their official ANU student email address. Information about your enrolment and fees from the Registrar and Student Services' office will also be sent to this email address.
Students are expected to check the Wattle site for announcements about this course, e.g. changes to timetables or notifications of cancellations. Notifications of emergency cancellations of lectures or tutorials will be posted on the door of the relevant room.
|Week/Session||Summary of Activities||Assessment|
|1||Topic: Course Admin and an Intro to Financial Mathematics Activity: Lecture/Workshop Reading: Lecture Notes 1; CFA Code of Ethics, CFA Standards of Professional Conduct, Sections I and VII; Textbook (Titman et al: Ch.1 & 2 & 5 & 6)|
|2||Topic: Time Value of Money – Valuing Shares Activity: Lecture/Workshop/Tutorial (Tutorial 1 Questions) Reading: Lecture Notes 2; Textbook (Titman et al: Ch.10 (pp. 301-308 & from p. 315 to the end of the chapter))|
|3||Topic: Time Value of Money – Valuing Debt Instruments Activity: Lecture/Workshop/Tutorial (Tutorial 2 Questions) Reading: Lecture Notes 3; Textbook (Titman et al: Ch.9 (up to p. 281))|
|4||Topic: Time Value of Money – Making Investment Decisions Activity: Lecture/Workshop/Tutorial (Tutorial 3 Questions) Reading: Lecture Notes 4; Textbook (Titman et al: pp. 378-380 (read first), & pp. 335-343)||Quiz 1|
|5||Topic: Diversification – Defining Risk and Understanding its Relationship with Return Activity: Lecture/Tutorial (Tutorial 4 Questions) Reading: Lecture Notes 5; Textbook (Titman et al: Ch.7)||Quiz 2|
|6||Topic: Diversification – Portfolio Theory Activity: Lecture/Tutorial (Tutorial 5 Questions) Reading: Lecture Notes 6; Textbook (Titman et al: Ch.8 (up to p. 238))||Mid-Semester Exam (TBC)|
|7||Topic: Diversification – The Capital Asset Pricing Model (CAPM), the Required Rate of Return for Risk and the Cost of Capital Activity: Lecture/Workshop/Tutorial (Tutorial 6 Questions) Reading: Lecture Notes 7; Textbook (Titman et al: Ch.8 & 14 (up to p. 469))|
|8||Topic: Arbitrage – Futures Contracts Part (A) Activity: Lecture/Workshop/Tutorial (Tutorial 7 Questions) Reading: Lecture Notes 8; Textbook (Titman et al: Ch.20)||Quiz 3|
|9||Topic: Arbitrage – Futures Contracts Part (B) and Options Contracts Part (A) Activity: Lecture/Workshop/Tutorial (Tutorial 8 Questions) Reading: Lecture Notes 9; Textbook (Titman et al: Ch.20)||Quiz 4|
|10||Topic: Arbitrage – Options Contracts Part (B) Activity: Lecture/Workshop/Tutorial (Tutorial 9 Questions) Reading: Lecture Notes 10; Textbook (Titman et al: Ch.20)|
|11||Topic: Arbitrage – Forwards, Futures and Options Contracts as Tools for Risk Management Activity: Lecture/Workshop/Tutorial (Tutorial 10 Questions) Reading: Lecture Notes 11; Textbook (Titman et al: Ch.20)||Quiz 5|
|12||Topic: Final Exam Details, Jobs in Finance Activity: Lecture/Tutorial (Tutorial 11 Questions) Reading: Lecture Notes 12|
Please see Wattle for tutors’ information.
Tutorial signup for this course will be done via the Wattle website. Detailed information about signup times will be provided on Wattle. When tutorials are available for enrolment, follow these steps:
1. Log on to Wattle, and go to the course site.
2. Click on the link “Tutorial enrolment”
3. On the right of the screen, click on the tab “Become Member of ……” for the tutorial class you wish to enter.
4. Confirm your choice
If you need to change your enrolment, you will be able to do so by clicking on the tab “Leave group…” and then re-enrol in another group. You will not be able to enrol in groups that have reached their maximum number. Please note that enrolment in ISIS must be finalised for you to have access to Wattle.
|Assessment task||Value||Due Date||Return of assessment||Learning Outcomes|
|In-Tutorial Quizzes||15 %||22/03/2019||31/05/2019||2,3,4|
|Mid-Semester Exam||25 %||01/04/2019||22/04/2019||1,2|
|Final Examination||60 %||06/06/2019||04/07/2019||1,2,3,4|
* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details
ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:
The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. Students may choose not to submit assessment items through Turnitin. In this instance you will be required to submit, alongside the assessment item itself, hard copies of all references included in the assessment item.
Moderation of Assessment
Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.
Assessment Task 1
Learning Outcomes: 2,3,4
· Students will be required to sit 5 in-tutorial quizzes throughout the semester.
· These quizzes will be run according to the schedule in the "Class Structure and Content" section of this summary (unless otherwise stated by the lecturer).
· The quizzes will be 10 – 15 minutes in duration and held at the end of the tutorial.
· Students MUST sit the quiz in the tutorial they are enrolled in, otherwise the quiz will not count.
· The content for the quizzes will be limited to the required material for the topic on which the tutorial is held (previous week’s lecture material).
· Students’ best 4 marks will count towards 15% of their overall course grade.
· Students will receive their marked quizzes back in the tutorial the following week.
· This assessment task needs to be completed in pen (NOT PENCIL).
- Note: Students are required to prepare worked solutions to tutorial questions, bring these solutions to tutorials, and be prepared to participate in tutorial discussions. This is an important step in preparing for the tutorial quizzes.
Assessment Task 2
Learning Outcomes: 1,2
· This exam is optional and redeemable for students.
· It is a closed book exam, with no formula sheet provided.
· The questions will be a mixture of theory and practical questions.
· Students will need to review and revise all material covered in lectures 1 to 4, inclusive (i.e. the time value of money topics), as well as content in corresponding workshops and tutorials.
· The mid-semester exam will count towards either 0% or 25% of a student’s overall course grade.
· More details regarding the exam will be provided as the exam approaches.
· This assessment task needs to be completed in pen (NOT PENCIL).
- Note: Mid-semester exams will be offered in weeks 6 or 7. Deferred exams for mid-semester exams will also be offered. Like final exams, applications for deferred mid-semester exams will be handled centrally. Deferred mid-semester exams are likely to be held towards week 10 or so.
Assessment Task 3
Learning Outcomes: 1,2,3,4
The final examination will be closed-book and based on all the work covered throughout the duration of the semester. The final examination is worth 60% (or 85% if the mid-semester exam is redeemed) of the overall course grade. The exam will include a mixture of theoretical and numerical questions. Students will be provided with further details regarding the exam as it approaches. This assessment task needs to be completed in pen (NOT PENCIL).
Academic integrity is a core part of our culture as a community of scholars. At its heart, academic integrity is about behaving ethically. This means that all members of the community commit to honest and responsible scholarly practice and to upholding these values with respect and fairness. The Australian National University commits to embedding the values of academic integrity in our teaching and learning. We ensure that all members of our community understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with. The University has policies and procedures in place to promote academic integrity and manage academic misconduct. Visit the following Academic honesty & plagiarism website for more information about academic integrity and what the ANU considers academic misconduct. The ANU offers a number of services to assist students with their assignments, examinations, and other learning activities. The Academic Skills and Learning Centre offers a number of workshops and seminars that you may find useful for your studies.
You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) as submission must be through Turnitin.
For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.
No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.
Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.
Extensions and Penalties
Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. The Course Convener may grant extensions for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.
Distribution of grades policy
Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.
Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.
Support for students
The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).
- ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
- ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
- ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
- ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
- ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
- ANUSA supports and represents undergraduate and ANU College students
- PARSA supports and represents postgraduate and research students
Analyst Forecasting, Asset Pricing, Market Efficiency
Dr Jozef Drienko