INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

COURSE OUTLINE
Kulliyyah Department Pro ramme Name o! Cour"e Cour"e Co#e Name $"% o! A&a#emi& "ta!! ' In"tru&tor$"% Economics and Management Sciences Economics Bachelor of Economics Money and Banking ECON 3410 Professor Dr Mohammed !sof "ssoc# Prof# Dr Salina $%# &assim "ssoc# Prof# Dr '!rkhan "li "(d!l Mana)

'his co!rse familiarises the st!dents *ith the role of money+ central (ank+ financial markets and financial instit!tions in the Rationale !or the economy# 'he co!rse dra*s the links (et*een the financial in&lu"ion o! the &our"e ' system and economic acti,ity in a co!ntry# 'his *o!ld ena(le mo#ule in the pro ramme st!dents to a))ly the kno*ledge that they get from this co!rse in making economic decisions as *ell as assisting them to com)rehend and e,al!ate the c!rrent economic sit!ations# Seme"ter an# Year O!!ere# Statu" Le(el Propo"e# Start Date )at&h o! Stu#ent to *e A!!e&te# "ll semesters Core 3 Semester 1+ -01-.-013 'hird year st!dents

+a&e to +a&e "ssessments Practical /ect!re Others Total ,ui#e# an# In#epen#ent Learnin

Total Stu#ent Learnin Time $SLT%

30 Cre#it Value (hours) Pre-re.ui"ite" (if any) Co-re.ui"ite" (if any) 3

1-

1-1

ECON 1210+ ECON 1310 Nil 'he o(%ecti,es of this co!rse are to4 1# 'o )ro,ide an !nderstanding of the *orkings of money+ financial markets and financial instit!tions *ithin the financial system of a co!ntry# -# 'o )ro,ide a !nderstanding of the theories and )olicy iss!es in the field of money and (anking# 3# 'o ena(le st!dents to make (etter5informed decision as a cons!mer+ sa,er+ (orro*er or a (!siness manager# 4# 'o ena(le st!dents to !nderstand con,entional financial theories as a )re5re6!isite for 7slamic Banking and 8inance co!rse 9ECON 3430:# "t the end of the co!rse+ the st!dents sho!ld (e a(le to4 1# Disting!ish the roles and f!nctions of financial instit!tions and markets in an economy+ )artic!larly in term of the feat!res and ,al!ation of ,ario!s financial markets 9(ond+ stocks+ money market: to assist them in making economic and financial decisions# -# $a,e clear !nderstanding on interest rates+ )artic!larly on the theories of interest rate determination+ factors affecting the changes in interest rates+ the conce)t of yield to mat!rity+ the yield c!r,e and !sing the yield c!r,e to )redict interest rates# 3# Descri(e the roles of central (ank and e,al!ate the cond!ct of monetary )olicy# 4# E;)lain the theories of e;change rate determination+ inter,ention mechanism and its relation to monetary )olicy#

Cour"e O*/e&ti(e"

Learnin Out&ome"

Tran"!era*le S0ill"1

St!dents are re6!ired to form gro!)s to disc!ss and com)lete a term )a)er on s)ecific to)ics on Money and Banking# By com)leting the e;ercises the st!dents sho!ld de,elo) leadershi) skills+ time management and analytical thinking skill as *ell as a(ility to )rocess information to e,al!ate sit!ation# Type of Assessment Description 7nde)endent st!dy+ gro!) disc!ssion 7n5class disc!ssion

Tea&hin -Learnin ' a""e""ment "trate y

A""i nment"'Term Paper Le&ture"

Cour"e Synop"i"

'he co!rse disc!sses the role of money+ central (ank+ financial markets and financial instit!tions in the economy# 7t dra*s the links (et*een the financial system and economic acti,ity in a co!ntry# St!dents are (eing e;)osed to disc!ssions on the determination of interest rates and the role of the central (ank in im)lementing monetary )olicy to ens!re a sta(le financial system# /ect!re+ Class Disc!ssion+ <eading "ssignment

Mo#e o! Deli(ery

A""e""ment Metho#" an# Type'Cour"e A""e""ment

LO 1+4 1+-+4 1+-+3+4 1+-+3 1+ -+3

Metho# "ssignment =!i> 'erm Pa)er Mid Semester E;amination 8inal E;amination TOTAL

2 10 12 12 -0 40 344

Mappin o! &our"e ' mo#ule to the Pro ramme Learnin Out&ome" Learnin Out&ome o! the &our"e Disting!ish the roles and f!nctions of financial instit!tions and markets in an economy+ )artic!larly in term of the feat!res and ,al!ation of ,ario!s financial markets 9(ond+ stocks+ money market: to assist them in making economic and financial decisions# $a,e clear !nderstanding on interest rates+ )artic!larly on the theories of interest rate determination+ factors affecting the changes in interest rates+ the conce)t of yield to mat!rity+ the yield c!r,e and !sing the yield c!r,e to )redict interest rates# Descri(e the roles of central (ank and e,al!ate the cond!ct of monetary )olicy# E;)lain the theories of e;change rate determination+ inter,ention mechanism and its relation to monetary )olicy# Pro ramme Out&ome"
01 003 04 02 03 00 01 0?

1#

-#

3#

5 5

5 5

5 5

5 5 5

5 5

4#

Content outline o! the &our"e ' mo#ule an# the SLT per topi& 6ee0" Topi&" Learnin 7our" Ta"0'Rea#in
(author/page)

Intro#u&tion @hy st!dy financial markets and instit!tionsA

Mishkin and Eakins 9-01-:+ Cha)ter 1

38 9

O(er(ie: o! the !inan&ial "y"tem 1# 8!nction of financial markets -# Str!ct!re of financial markets 3# 7nternationali>ation of financial markets 4# 8!nctions of financial intermediation 2# 'y)es of financial instit!tions 3# <eg!lation of the financial system Money8 the payment "y"tem an# the e&onomy 1# Meaning of money -# 8!nctions of money 3# E,ol!tion of the )ayments system 4# Meas!ring money Un#er"tan#in the intere"t rate" 1# Meas!ring interest rates -# Other meas!res of interest rates 3# Distinction (et*een real and nominal interest rates 4# Distinction (et*een interest rates and ret!rns )eha(ior o! intere"t rate" 1# Determinants of asset demand -# Benefits of di,ersification 3# /oana(le f!nds theory of interest rates Ri"0 an# term "tru&ture o! intere"t rate 1# <isk str!ct!re of interest rate -# 'erm str!ct!re of interest rate

Mishkin and Eakins 9-01-:+ Cha)ter BNM 91???:+ Cha)ter -

3 Mishkin 9-000:+ Cha)ter 3

<

0 Mishkin and Eakins 9-01-:+ Cha)ter 3

Mishkin and Eakins 9-01-:+ Cha)ter 4

>

Mishkin and Eakins 9-01-:+ Cha)ter 2

Central *an0"1 a lo*al per"pe&ti(e 1# Origin and str!ct!re of 8ederal <eser,e System -# $o* inde)endent is the 8ed 3# Central (anks aro!nd the *orld 4# E;)laining central (ank (eha,ior 2# Sho!ld central (ank (e inde)endentA Con#u&t o! monetary poli&y1 tool"8 oal" an# tar et" 1# 'ools of monetary )olicy -# Boals of monetary )olicy 3# Central (ank strategy4 Cse of targets 4# Choosing the targets Money mar0et" 1# Defining money markets -# P!r)ose of money market 3# Money market )artici)ants 4# 8eat!res of money market instr!ments 2# Com)aring money market instr!ments )on# mar0et 1# P!r)ose of the ca)ital market -# Ca)ital market )artici)ants 3# Ca)ital market trading 4# Ca)ital market sec!rities4 (ond 2# 'y)e of (onds 3# Bond yield calc!lation and ,al!e of co!)on (onds Sto&0 mar0et 1# 7n,esting in stocks 4 'y)es of stock -# Com)!ting the )rice of common stock 3# $o* the market sets sec!rity )ricesA 4# Stock market inde;es 2# <eg!lation of the stock market +orei 1# -# 3# 4# 2# n eB&han e mar0et 'he definition of foreign e;change rates 'he significance of e;change rates E;change rates in the long r!n E;change rates in the short r!n E;)laining changes in e;change rates

Mishkin and Eakins 9-01-:+ Cha)ter ?

@8A

1-

Mishkin and Eakins 9-01-:+ Cha)ter 10 BNM 91???:+ Cha)ter 3D4

34

0 Mishkin and Eakins 9-01-:+ Cha)ter 11

33

Mishkin and Eakins 9-01-:+ Cha)ter 1-

39

Mishkin and Eakins 9-01-:+ Cha)ter 13

3;

Mishkin and Eakins 9-01-:+ Cha)ter 12

3<

)an0in an# mana ement o! !inan&ial in"titution" 1# Balance sheet of a (ank -# Basic o)erations of a (ank 3# Beneral )rinci)les of (ank management 4# Off5(alance sheet acti,ities 2# Meas!ring (ank )erformance 3# 8inancial inno,ations 0# 7ntrod!ction to 7slamic Banking and 8inance "ssignments =!i>>es Mid5term 'erm )a)er Presentation 8inal e;am

Mishkin and Eakins 9-01-:+ Cha)ter 10

4 ? 1 10 3 13 Re.uire# re!eren&e" "upportin the &our"e

Re.uire# Mishkin+ 8# S# and Eakins+ S# B# 9-01-:# Financial Markets and Institutions# Pearson4 Blo(al Edition+ 0th edition# Re&ommen#e# re!eren&e" "upportin the &our"e Re&ommen#e# Bank Negara Malaysia# 91???:# The Central Bank and The Financial System in Malaysia !ecade of Change# Cha)ters -+ 3 D 4# &!ala /!m)!r4 Bank Negara Malaysia# Mishkin+ 8rederic S# 9-000:# The "conomics of Money# Banking# and Financial Markets# Pearson5 "ddison5@esley+ 1th edition# Ne:"paper'Cournal arti&le" 6e*"ite" ***#(nm#go,#myE ***#sc#com#my

At the en# o! the pro ramme8 Stu#ent" are a*le to1 1# Demonstrate an !nderstanding of economic kno*ledge (oth from

con,entional and 7slamic )ers)ecti,es and a*areness of contem)orary de,elo)ment of the disci)line#
-#

&no*ledge

Ctili>e 6!antitati,e and 6!alitati,e techni6!es and creati,e thinking to sol,e economic )ro(lems# Coo)erate *ith others in )ro,iding sol!tion to )ro(lem faced in socially res)onsi(le manner for the )rogress of the nation and the ummah#

Practical Skills

3#

Social skills and <es)onsi(ilities

4#

Demonstrate (eha,ior consistent *ith )rofessional ethics and 7slamic ,al!es#

2#

Fal!e+ "ttit!des+ Professionalism

Demonstrate effecti,e comm!nication skills *ith m!t!al res)ect#

3#

Comm!nication

De,elo)+ im)lement and e,al!ate (asic strategies and action )lan#

Pro(lem Sol,ing and Scientific Skill 7nformation Management and /ifelong /earning Managerial and Entre)rene!rial

0# <ecogni>e the im)ortance of contin!ing )rofessional de,elo)ment and

changes in economics#
1#

Be creati,e and inno,ati,e in managerial and entre)rene!rial endea,ors#

?#

Demonstrate effecti,e leadershi) skills im(!ed *ith 7slamic ,al!e#

/eadershi) and 'eam Skills