Course Outline (1) (1)

FINANCIAL INSTITUTIONS
Objectives:
After the completion of this course the students will:
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Identify distinguishing nature of financing and investing decisions made by
different financial institutions.
Learn the skills of analyzing different aspects of a financial institution including
liquidity, leverage, profitability and efficiency aspects.
Know procedure to Manage interest rate risk and various techniques of structuring
the balance sheet for the purpose of managing the interest rate risk.

Course Outlines:
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Role of Financial Markets and Institutions
 Financial markets and efficiency
 Securities traded in financial markets,
 Financial market regulations
 Financial institutions in financial markets.
Financial Markets
 Instruments and yield
 Money market instruments & capital market instruments
 Bond equivalent yield, discount yield, annual yield
 Importance of cost of funds and the return on different types of assets.
Money and Bond Markets
 Institutional use of money markets
Commercial Banking
 Bank sources of funds
 Comparison of fund resources among bankers
 Uses of funds by banks
 Off-balance sheet activities
Prudential Regulations
 State Bank of Pakistan Regulations for Financial Institutions
Bank Management
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Managing liquidity
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Managing interest rate risk, managing exposure to
default risk
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Bank capital management
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Management based on forecasts
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Integrated bank management
Bank Performance
 Performance evaluation of banks
 Usage stock prices to assess performance potential,
 Risk evaluation of banks, how to evaluate a bank’s performance
Performance Evaluation
 Common size statements and trend analysis

 Measuring the liquidity position
 Investment portfolio performance
 Credit risk ratios
 Asset utilization, profitability
 Integrated model of profitability
 Non-Bank Financial Institutions
 Savings Institutions
 Finance Companies
 Leasing Companies, Insurance Companies
Compulsory Reading:
Madura, Jeff. Financial Markets and Institutions, Florida: Thomson Learning Inn.
Further Reading:
Thygerson, J. Kenneth. Financial Markets and Institutions (Latest Ed.),

INVESTMENT & SECURITY ANALYSIS
Objectives:
After the completion of this course the students will:
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Learn different form of short term and long term investments
Understand the basic concepts about risks and return on investments and loans
Analyze overview of the structure and functioning of investment markets

Course Outlines:
1. Basics of Investment
 Overall perceptive of investment
 Importance of investment decision
 Investment decision process
2. Investment Alternatives
 Organizing Investment Alternatives
 Marketable Financial Assets
 Money market securities
 Fixed income securities
 Equity securities
 Derivative securities
3. Indirect Investments
 Types of investment companies
 Types of mutual funds
 Mechanics of indirect investment
 Investment company performance
4. Securities markets
 The Primary markets
 The Secondary markets
 Stocks market indexes
 Bond markets
 Derivatives market
5. Return and risks from investment
 Returns
 Risks
 Total returns & Return Relative
 Measuring risks and returns
6. Portfolio Theory
 Dealing with uncertainty
 Introduction to modern portfolio theory
 Analyzing portfolio risk
 The components of portfolio risk

 Calculating portfolio risks
7. Portfolio selection
 Building Portfolio using Markowitz principles
 Alternative methods of obtaining the efficient frontier
 Optimal Assets classes
 Diversification on risk
8. Assets pricing Model
 Capital market theory
 The Equilibrium return-risk trade off
 The security market line(SML)
 Estimation of SML
9. Common stock valuation
 Discounted cash flow techniques
 Relative Valuation Techniques
 Analysis of common stocks
 Building stocks portfolio
 The Active & Passive Approach
10. Market Efficiency
 The concept of market efficiency
 Tests of market efficiency
 Behavioral finance and market anomalies
 Earning announcements
Compulsory Reading:
Jones, P. Charles. Investment Analysis and Management (10th Ed.).
Further Readings:
Mandel, L., and Thomas, J. O. Brian. Investments.