FACULTY OF BUSINESS AND LAW
Course Outline
Newcastle Business School
ACFI2005
Finance
Semester 1, 2011
Callaghan Campus
Unit Weighting:
10 Units
Lecturer and Course Coordinator: Paul Docherty
ACFI2005 - Finance
CONTENTS
1.
Teaching Staff
3
2.
Contact Hours and Teaching Methods
3
3.
Blackboard
4
4.
Student Email
4
GENERAL COURSE INFORMATION
4
5.
Brief Course Description
4
6.
Assumed Knowledge
4
7.
Course Objectives / Learning Outcomes
5
8.
Link to Graduate Attributes
5
9.
Course Content
5
10. Continuous Course Evaluation and Improvement
6
TEXTBOOKS AND REFERENCES/READINGS
6
11. Textbooks and Readings
6
12. Prescribed Text
6
13. Recommended Texts/Readings
6
TOPIC AND LECTURE OUTLINE
7
14. Course Schedule
7
ASSESSMENT DETAILS AND POLICIES
7
15. Types and Due Dates of Assessment
7
16. Details of Assessment
8
17. Penalties
9
18. Academic Integrity, Plagiarism and Turnitin
9
19. Cover Sheets for Assessment
10
Assessment Grades and Percentages
10
ACADEMIC SKILLS RESOURCES
10
20. Academic Skills Resources
10
UNIVERSITY POLICIES AND GENERAL INFORMATION
21. Extension of Time for Assessment Items, Deferred Assessment and Special
Consideration
11
22. Students with a Disability or Chronic Illness
12
23. Changing Your Enrolment
12
24. Other Policies Related to Your Enrolment
12
25. Alteration of this Course
13
26. Careers Service
13
FACULTY CONTACTS
27. School/Faculty Contact Details
APPENDICES
2
11
13
13
14
Course Coordinator: Paul Docherty
ACFI2005 - Finance
STAFF AND COURSE DELIVERY ARRANGEMENTS
1.
Teaching Staff
Course Coordinator and Lecturer
Name
Room and Building
Phone Number
Email
Consultation Hours
Paul Docherty
SRS213 – Social Sciences Building
4921 5046
paul.docherty@newcastle.edu.au
Wednesday 4-5pm
Duty Tutor
Name
Room and Building
Email
Consultation Hours
David Edmunds
TBA On Blackboard
David.Edmunds@newcastle.edu.au
Tuesday 2pm – 4pm
The duty tutor will be available to any student enrolled in this course for consultation
without an appointment.
Course Tutor(s)
Name
Email
2.
Alan Rai, John MacDonald-Hill, David Edmunds,
Peter Thompson, Bronwyn McCredie.
First name.Last name@newcastle.edu.au
Contact Hours and Teaching Methods
Lecture, 2 hours per week for full term.
Tutorial, 1 hour per week for 12 weeks.
There are two alternate lecture times available. Students are advised to attend the
Wednesday lecture where possible, as venue of the Monday lecture can only hold a
limited number of students.
Lecture Times
Wednesday 5.00 PM - 7.00 PM [RW149 - NURSTH]
Monday 11.00 AM - 1.00 PM [EF02]
2.1
Tutorial Registration
You are required to enrol in tutorials via the Web using links to the tutorial registration
system. Tutorial registration will be open between 10:00 am, Monday 14 February
and 5:00 pm, Friday 11 March. After this date, students must direct any enquiries to
the Enquiry Centre - 15000-UoN-Enquiries@newcastle.edu.au. Note that tutors are
unable to allocate students to a tutorial.
Please check the Web after enrolment to confirm that you are in the tutorial selected.
It is also advisable to check announcements on the course Blackboard website to
confirm that the tutorial selected is being offered (some tutorials will be cancelled if
registrations are low).
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
3.
Blackboard
Blackboard is used in this course (https://blackboard.newcastle.edu.au). Blackboard is
the major communication mechanism for students and staff. You are responsible for
regularly accessing this site for additional information related to your courses.
To login to Blackboard use your Uni ID and password. Your Username is your
student number prefaced with a lower case ‘c’ (eg c9999999). Your Password is the
Access key on your student card followed by day and month of birth (eg 4vju0606),
unless you have altered your password.
For Blackboard help please log a call with 17000 IT Service Desk or visit
http://www.newcastle.edu.au/service/blackboard
4.
Student Email
Your student email is cstudentnumber@uon.edu.au. Please check it regularly because
it is the usual means by which the University will contact you. Note that you should
make regular checks of both your student email and blackboard sites.
GENERAL COURSE INFORMATION
5.
Brief Course Description
Financial institutions and markets are the cornerstones of the modern financial
system, and as such knowledge of these organisations is important in any
professional career in the business world.
This course provides students with an introduction to the Australian financial markets
and an evaluation of the institutions, instruments and participants involved in the
industry. The markets to be evaluated include the equity, bond, futures, and options
markets. The course systematically reviews each of these financial markets and
examines the various institutional participants and the different types of financial
instruments offered. Information is vital to the today s financial professional.
Accessing, processing, analysing and communicating information is an important
attribute developed within the course.
6.
Assumed Knowledge
Nil
4
Course Coordinator: Paul Docherty
ACFI2005 - Finance
7.
Course Objectives / Learning Outcomes
On successful completion of this course, students will be able to:
1. Describe and communicate the components of the Australian financial system
2. Identify and explain the basic instruments of corporate funding
3. Comprehend and explain how securities are traded
4. Demonstrate how derivative instruments are valued
5. Apply basic financial mathematics to financial problem solving.
6. Analyse the operations of the equity, bond, futures and options markets
7. Access, manage and utilise sources of current information and media to further
expand their financial knowledge.
8.
Link to Graduate Attributes
The University Graduate Attribute Domains Policy is at:
http://www.newcastle.edu.au/policy/000836.html
Graduate attributes
Statement from graduate profile Related course
(BBus)
objective(s)
Method of
assessment
Scholarship
8, 9, 7
1, 7, 5
Tutorial Assessment,
quiz, Final Exam
Professionalism
1, 7, 3
1, 2, 3, 4, 5, 6, 7
Tutorial Assessment,
quiz, Final Exam
Community engagement
9.
Course Content
Lectures will include, but may not be restricted to, the following topics:
1. An overview of the financial system
2. The share market and corporations
3. Corporations issuing equity in the share market
4. Investors in the share market
5. An examination of short-term debt
6. An examination of long-term debt
7. An introduction to interest rate determination
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
8. Futures markets and forward-rate agreements
9. Options markets
10.
Continuous Course Evaluation and Improvement
As part of the Faculty’s commitment to continuous improvement in its courses,
student evaluation of courses surveys are carried out on each offering. As a result of
feedback from students this course has been modified in the following way:
1.
Practise multiple choice questions will be uploaded onto the Blackboard site
each week.
2.
Most past papers will be made available to students and lectures updated to
include the latest developments in financial markets.
TEXTBOOKS AND REFERENCES/READINGS
11.
Textbooks and Readings
As part of the learning process, students are expected to undertake readings and
complete exercise questions from the prescribed text on a weekly basis. While
recommended texts and readings are not compulsory, they can be used for further
learning in various topic areas
12.
Prescribed Text
Viney, C, 2009, McGrath’s Financial Institutions, Instruments and Markets, 6th edition,
Mcgraw-Hill Irwin, North Ryde
13.
Recommended Texts/Readings
Hunt, B. and C. Terry, 2002, Financial Institutions and Markets, Nelson, Melbourne.
Knox, D.M., Zima, P., and Brown, R.L., Mathematics of Finance, 2nd edition, 1999,
McGraw-Hill, Roseville.
Kidwell, D, Brimble, M, Beal, D, Willis, D, 2007 Financial Markets, Institutions and
Money, Wiley, Milton Queensland.
Madura, J, 2008, Financial Markets and Institutions, 8th edition, Cengage Learning.
Mason, USA.
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Course Coordinator: Paul Docherty
ACFI2005 - Finance
TOPIC AND LECTURE OUTLINE
14.
Course Schedule
Week
1
Date
28/2/11
Topic
Overview of the
Financial System
Commercial Banks
Reading Guide
Reading: Viney Ch 1
2
7/3/11
3
14/3/11
Non-Bank Financial
Institutions
Issuing Equity
Reading: Viney Ch 3
4
21/3/11
5
28/3/11
Reading: Viney Ch 6
4/4/11
Investors in the
Share Market
Financial Maths
6
7
11/4/11
Mid Semester Quiz During Lecture
8
18/4/11
9
10
11
12
13
Reading: Viney Ch 2
Reading: Viney Ch 5
Reading: Viney Ch 8
Debt Market (Short
Reading: Viney Ch 9
Term)
Mid Semester Recess: 22 April – 29 April 2011
– Includes Good Friday and Anzac Day
2/5/11
Debt Market (Long
Reading: Viney Ch 10
Term)
9/5/11
Foreign Exchange
Reading: Viney Ch 15
Markets
16/5/11
Derivatives 1:
Reading: Viney Ch 18 and Ch 19
Futures Contracts
23/5/11
Derivatives 2:
Reading: Viney Ch 20
Options Contracts
30/5/11
STUVAC – Revision
Examination period: 6 June – 24 June 2011
ASSESSMENT DETAILS AND POLICIES
15.
Types and Due Dates of Assessment
Mid Semester Quiz – During Lecture (25%)
Tutorial Assessment (15%)
Homework (10%)
Examination: Formal (50%)
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
Assessment
Methods
Related
Learning
Outcomes
Weighting
(%)
Due
Date
Method of
Submission
Returnable
(yes/no)
Homework
and
Participation
Tutorial
Assessment
1,2,3,4,5,6,7 10%
Assessed
during class
In Tutorial
Yes
1,2,3,4,5,6,7 15%
In Tutorial
Yes
MidSemester
Quiz
1,2,3,5,6
In Lecture
No
Final Exam
1,2,3,4,5,6,7 50%
During
Tutorials
Weeks 5, 9,
12
During
Lectures
Week 7
6/6/2011 –
24/6/2011
Formal
Exam
No
16.
25%
Details of Assessment
Tutorial Participation and Homework (10%)
Each week, tutorials will assess the contribution provided by each student to the
tutorial group. This includes contributing to class discussions and preparing answers
to tutorial problems. One homework question will be collected in all weeks where
there is not a tutorial assessment task. Homework questions are posted on the
Blackboard site and worked solutions will be uploaded a week after submission for
student feedback. The homework is to be completed individually, and evidence of
copying will be harshly dealt with.
NOTE: You will not be rewarded for continually speaking above other students in
class.
Tutorial Assessment (15%)
In weeks 5, 9 and 12 students will be required to complete a question during tutorials.
This question will relate to work completed since the previous quiz. A selection of 4
questions will be placed on Blackboard a week before the tutorial to allow students to
prepare. During the tutorial, each student will then be randomly allocated one of the
five questions and given 10 minutes to complete an answer. There will be three
tutorial quizzes in total, and the best two out of three marks that a student achieves
will count to their final assessment.
Please note: There will be no special consideration for this assessment item.
Quiz (25%)
This will be held during the lectures on 11/4/11 and 13/4/11. Students can attend
either quiz but must not attend both. The quiz will consist of 30 multiple choice
questions and one short essay response, covering work from lectures 1-5. The
questions will be both numerical and theoretical in character.
Final Exam (50%)
This will be held in the formal exam period. The exam will consist of two sections.
Section One (10% of total marks) will consist of 20 multiple choice questions
covering work from lectures 8-12).
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Course Coordinator: Paul Docherty
ACFI2005 - Finance
Section Two (40% of total marks) will consist of 8 short answer questions from
the entire course. Each question will be of equal weighting.
Note that it is your responsibility to keep a copy of each assessment task that
is submitted.
17.
Penalties
17.1 Late Submission
University policy is that an assessment item submitted after the due date,
without an approved extension, will be penalised at a rate of 10% per day of
the possible maximum mark for the assessment item for each day or part day
that the item is late. Weekends count as one day in determining the penalty.
Assessment items submitted more than five days after the due date will be
awarded zero marks.
18.
Academic Integrity, Plagiarism and Turnitin
The Faculty of Business and Law is committed to ensuring academic integrity
amongst its staff and students. Academic integrity is based on values of honesty,
respect, fairness, trust and responsibility. These values are fundamental to our
teaching and learning in the Faculty. Academic misconduct, including plagiarism,
copying another student’s work and cheating in exams, is contrary to the values of
academic integrity and is not tolerated in the university.
18.1 Plagiarism
For more details on plagiarism, see the Blackboard site “Important University
Policies and Academic Honesty Module”. If you do not have access to this
Blackboard site, please email Anne.Sullivan@newcastle.edu.au.
The policy on Student Academic Integrity can be accessed directly at:
http://www.newcastle.edu.au/policylibrary/000608.html and the Policy on Student
Academic Dishonesty at: http://www.newcastle.edu.au/policylibrary/000609.html
18.2 Academic Honesty Module
All students must complete the online Academic Honesty Module prior to
submitting assignments. This module provides you with a self-paced online
quiz to assist you to understand the principles and processes of academic
integrity.
You must tick the box on the Assignment Cover Sheet (Business and Law)
to indicate that you have completed the Academic Honesty Module. For
students who submit their assignments electronically and who do not
provide a signed coversheet, it will be assumed that you have completed the
Academic Honesty Module. You can revisit the Module throughout your
course, as necessary, to remind yourself of the requirements.
18.3 Turnitin
Turnitin is text matching software that is used by the University to assist you
with writing and referencing. Further information on Turnitin is available at:
http://www.newcastle.edu.au/service/academic-integrity/turnitin
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
To check your own work, you may access the Turnitin site through the
Assignments area in the Blackboard website for this course.
In cases of alleged plagiarism or collusion, Turnitin reports may be used by
lecturers as evidence.
If you require assistance with Turnitin, please contact: ithelp@newcastle.edu.au
If you are unsure of how to correct your work after submitting to Turnitin, refer
to the Academic Honesty Module or to the Infoskills Website:
http://www.newcastle.edu.au/service/library/tutorials/infoskills/index.html
19.
Cover Sheets for Assessment
A Faculty specific Assignment Cover Sheet is to be completed and attached to each
submission.
Copies of the Assignment Cover Sheet may be found at:
http://www.newcastle.edu.au/service/student-forms/
Assessment Grades and Percentages
The policy that outlines criteria for distinguishing between grades is provided at:
http://www.newcastle.edu.au/policylibrary/000649.html
The criteria provide information about the standard expected for each of high
distinction, distinction, credit, pass and fail.
ACADEMIC SKILLS RESOURCES
20.
Academic Skills Resources
Infoskills
The Infoskills website is also essential for information search, evaluation, assignment
writing and referencing:
http://www.newcastle.edu.au/services/library/tutorials/infoskills/index.html
Learning Development Blackboard Site
When you log on to Blackboard you will have access to the Learning Development
Course.
Learning Development
The University offers all students free and confidential help with academic skills
through Learning Development. Learning Skills Advisors are available to provide
individual advice to students in addition to offering special workshops on academic
skills. If you are having difficulties contact them:
http://www.newcastle.edu.au/unit/centre-for-teaching-and-learning/learning-development
NBS Student Manual
The NBS has produced a Student Manual that outlines topics such as assignment
preparation, referencing and writing style. The manual is available on the following
website: http://www.newcastle.edu.au/school/business/postgraduate-business/forstudents/current-students.html
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Course Coordinator: Paul Docherty
ACFI2005 - Finance
Gold Guide to Academic Quality
The “Gold Guide” is designed to assist you to understand and meeting academic
requirements, by summarising important points and providing website links. It gives you
essential information on the basics of academic writing and critical thinking, essay
writing, referencing, business reports, presentations and teamwork. The referencing
style in the “Gold Guide” is APA style which is the Faculty standard for Business
courses. An electronic copy of the Gold Guide is available at:
http://www.newcastle.edu.au/Resources/Faculties/Faculty%20of%20Business%20and%20Law/
Resources/Students/Gold-Guide-APA-style.pdf
The Australian Guide to Legal Citation
Unless otherwise advised, students should use the Australian Guide to Legal Citation
(3rd ed) in preparing written work. The Guide may be viewed online at:
http://mulr.law.unimelb.edu.au/go/AGLC3
Research Skills
Students who are unclear about planning research, the collection, evaluation and
ethical use of information, writing and plagiarism and referencing conventions are
recommended to check the University of Newcastle Info Skills Web site at:
http://www.newcastle.edu.au/services/library/tutorials/infoskills/index.html
English Chinese Bilingual Resources for Business
The below link provides online access to English-Chinese Bilingual Resources for
mandarin speaking students. These resources were complied as business focused
resources and include English-Chinese Dictionaries, Online Language Tools, and
Databases using Chinese Translation Service and Language Interfaces, as well as
End Note tutorials.
http://www.newcastle.edu.au/Resources/Faculties/Faculty%20of%20Business%20and%20La
w/Students/English-Chinese-Bilingual-Resources-for-Business.pdf
UNIVERSITY POLICIES AND GENERAL INFORMATION
21.
Extension of Time for Assessment Items, Deferred Assessment
and Special Consideration
To apply for special consideration, students must complete the online form at
https://intraweb.newcastle.edu.au/sc/Pages/Login.aspx. This form must be accompanied
by the required evidence and submitted to a Student Hub.
Before completing the online application form, please go to the Procedure and the
online form for further information: http://www.newcastle.edu.au/policylibrary/000641.html
Students should be aware of the following important deadlines:



Requests for Special Consideration must be lodged no later than 3 working
days after the date of submission or examination.
Requests for Extensions of Time on Assessment Items must be lodged
prior to the due date of the item.
Requests for Rescheduling Exams must be lodged no later than 10
working days prior to the first date of the examination period.
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
22.
Students with a Disability or Chronic Illness
If you have a disability or chronic illness which you feel may impact on your studies,
please feel discuss your support needs with your lecturer or course coordinator, and
consider accessing the resources provided by the university. These include Student
Support Service (Disability) but note that students must be registered to receive this
support. To register, please contact the Disability Liaison Officer on (02) 4921 5766,
or via email at: student-disability@newcastle.edu.au
For more information, please visit the policy via the Blackboard site on Important
Policies or the website: www.newcastle.edu.au/service/disability .
23.
Changing Your Enrolment
The last date to withdraw without financial or academic penalty (called the HECS
Census Date) is 31 March in Semester 1 or 31 August for Semester 2.
Students can change their enrolment online at the myHub site that is accessed
through Online Services.
Students can add a course any time during the first two weeks of a term (semester
or trimester). Late enrolments will require special permission from the course
coordinator. Students will need to complete the form Application to Add a Course
after the First Two Weeks of Term that you can access through Online Forms >
Enrolments.
Students can withdraw from a course before a term's census date and domestic
students will not be liable for fees for the course. International students will be subject
to the International student Refund Policy and there may be some financial penalties.
Any withdrawal from a course that is processed prior to the census date will not
appear on your academic transcript.
Students can withdraw from a course after the census date but before the last day of
term they will be granted a Withdrawal Without Academic Penalty (WW) and incur a
financial penalty.
Students can withdraw from a course after the last day of term however Fail Grade
(FF) will be awarded.
If you have encountered difficult personal circumstances there may be grounds for
remission of fees. For more advice contact your nearest Student Hub for advice.
24.
Other Policies Related to Your Enrolment
Please go to the Blackboard site, “Academic Honesty Module”, for information and
web addresses of policies related to:
 Changing Your Enrolment
 Rules Governing Academic Awards
 Responsibilities and Expectations of Staff and Students
 Student Complaints Procedures
 Appeal of Results
 Student Academic Conduct Officers
 Procedure for Remarks and Moderation
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Course Coordinator: Paul Docherty
ACFI2005 - Finance
25.
Alteration of this Course
No change to this course outline will be permitted after the end of the second week of
the term except in exceptional circumstances and with Head of School approval.
Students will be notified in advance of any approved changes to this outline.
26.
Careers Service
Career success takes planning. It is important to familiarise yourself with the Careers
& Employment website: www.newcastle.edu.au/services/careers. Register your email
with Careers & Employment to receive advanced notification of part-time job
vacancies, program related job opportunities (including traineeships and vacation
work), and graduate opportunities. Careers & Employment run a number of career
related activities throughout the year, including the annual Careers Expo, workshops
and professional development programs, job application checking service, interview
practice and careers counselling sessions.
The Careers Service has majors pages that are intended to assist you with your
career exploration and planning by providing information about employment options
linked to majors. The type of information includes sample job titles, job descriptions,
potential employers, salary and labour market information, industry and professional
association contacts. You can access the majors pages at:
http://www.newcastle.edu.au/service/careers/majors/index.html
FACULTY CONTACTS
27.
School/Faculty Contact Details
School
Newcastle Business School - Callaghan
Location
SRS130
Telephone
49215511
Facsimile
49216911
Email
Business-School@newcastle.edu.au
Faculty Student Services:
Location
Student Hubs at Callaghan, Ourimbah and Newcastle City
Telephone
(02) 49215000
Facsimile
(02) 49854200
Email
15000-UoN-Enquiries@newcastle.edu.au
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
APPENDICES
Appendix 1: Tutorial Guide
ACFI2005 Semester 1, 2011
All questions come from the prescribed text: Viney, C. ‘Financial Institutions, Instruments
and Markets’ 6th Edition.
Week 1 : No Tutorials
Week 2: Week Beginning 7/3/11
Viney Chapter 1 Essay Questions 2,3,4,5,10,11
Week 3: Week Beginning 14/3/11
Viney Chapter 2 Essay Questions 3,4,5,8,10,11a, 12a, 13a.
Week 4: Week Beginning 21/3/11
Viney Chapter 3 Essay Questions 2,5,6,7,8,14
Week 5: Week Beginning 28/3/11
Viney Chapter 5 Essay Questions 3,5,7,12
#TUTORIAL ASSESSMENT HELD THIS WEEK#
Week 6 : Week Beginning 4/4/11
Viney Chapter 6 Essay Questions 2,5,6,7,10,13,14
Week 7: Week Beginning 11/4/11
No tutorials due to Mid-Semester Quiz
Week 8: Week Beginning 18/4/11
Viney Chapter 8 Essay Questions 1a,1b,3a,3c,5b,5c,6b,9b
**** MID SEMESTER BREAK ****
________________________________________________________
Week 9: Week Beginning 2/5/11
Viney Chapter 9 Essay Questions 2,3,10,12,13
#TUTORIAL ASSESSMENT HELD THIS WEEK#
Week 10: Week Beginning 9/5/11
Viney Chapter 10 Essay Questions 4,6,8,10,11,13
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Course Coordinator: Paul Docherty
ACFI2005 - Finance
Week 11: Week Beginning 16/5/11
Viney Chapter 15 Essay Questions 1,8,9,11,12
Week 12: Week Beginning 23/5/11
Viney Chapter 19 Essay Questions 2,4,7,9
#TUTORIAL ASSESSMENT HELD THIS WEEK#
Week 13: Week Beginning 30/5/11
Viney Chapter 20 Essay Questions 1,3,5,9,10
Appendix 2: Tutorial Assessment Problems
Tutorial Assessment 1: Week beginning 28/3/11
Question 1
The issue of new financial instruments generates a flow of funds through the primary
markets from the provider of funds to the user of those funders. This flow can occur through
a direct financial flow market or an intermediated financial flow market.
i) Describe the differences between direct finance and intermediated finance.
ii) Critically analyse the advantages and disadvantages of intermediation.
Question 2
Off-balance sheet business has grown to become a significant component of banking
operations.
i) Explain what is meant by off-balance sheet business, including an examination of the
four main categories of off-balance sheet business.
ii) Discuss why there has been a growth in the off-balance sheet business conducted by
banks.
Question 3
Insurance offices are an important non-bank financial institution.
i) Define the two categories of insurance offices and explain the main types of
insurance policies offered by each type of insurer.
ii) Discuss why general insurance offices and life insurance offices invest in different
asset categories.
Question 4
Within the context of the Basel II capital accord, explain and discuss:
a) Pillar 2: The supervisory review of capital adequacy
b) Pillar 3: Market Discipline
Tutorial Assessment 2: Week Beginning 2/5/11
Question 1
Listing on a stock exchange might be highly desirable for a company, but there are a number
of requirements, conditions and costs associated with becoming a publicly listed corporation.
a) Discuss the ASX profit test and asset test requirements.
b) Analyse the advantages and costs that are incurred when a company becomes a
publicly listed corporation.
Course Coordinator: Paul Docherty
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ACFI2005 - Finance
Question 2
Commercial papers (or promissory notes) and bank-accepted bills are two different money
market debt instruments.
i) Describe the characteristics of a bank-accepted bill and identify the roles of the
parties involved in the issuance of a bank-accepted bill.
ii) Critically analyse the similarities and differences between commercial papers and
bank-accepted bills.
Question 3
Dividend reinvestment schemes can be an important source of funds for listed companies.
i) Explain what a dividend reinvestment scheme is and how it operates.
ii) Critically analyse the advantages and disadvantages of a dividend reinvestment
scheme.
Question 4
The manager of a company is worried because an increase in accounts receivables is
affecting the liquidity of their company.
i) Explain how the firm may be able to use accounts receivable financing to solve the
cash-flow problem. Discuss how this form of finance works and explain which
institutions provide this form of finance.
ii) An alternative arrangement is debt factoring. Describe the nature and operation of
factoring as a form of finance and explain why a company may prefer debt
factoring to accounts receivable financing.
Tutorial Assessment 3: Week Beginning 23/5/11
Question 1
The European Monetary Union has had a significant impact on the structure and operation of
the Foreign Exchange market. Discuss the process of monetary union in Europe and discuss
the implications for foreign exchange markets.
Question 2
Leasing is a common form of long-term financing. There a number of different structures
available for lease agreements.
i) Explain the differences between a direct finance lease, leveraged finance lease and
equity leasing.
ii) Critically analyse the advantages of lease finance to a lessee.
Question 3
Discuss how Nick Leeson’s use of derivative contracts resulted in the collapse of Barings
Bank.
Question 4
While financial futures contracts may be used to hedge the risk of fluctuations in the prices of
the underlying securities, the use of futures contracts often entails some risk. What are the
sources of risk arising from the use of futures contracts in risk management? Explain and
demonstrate the implications of each type of risk.
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Course Coordinator: Paul Docherty