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Appendix: Course Outline

Course name

Financial Institutions and Markets

Course code

ABA 318

Semester

May-August 2016

Lecturer/email address

Felix Weru

Time

8.30-11:30PM

Day of the week

fweru@iat.ac.ke

Monday

A. COURSE OBJECTIVE
To give students a fundamental and practical understanding of the workings of the financial
system.
B. COURSE CONTENT
Essence of financial institutions; role of financial markets in resource allocation: lending,
payments and risk-bearing; financial system: its operation, efficiency, stability and
government intervention; determination of market interest rates; portfolio theory ;financial
institutions: central bank, commercial bank, and other non-banking institutions, merchant
banks and hire purchase companies; special financial institutions in Kenya: Industrial and
Commercial Development Corporation, Industrial Development Bank, Development
Finance Company of Kenya, Kenya Industrial Estates; Markets for funds: capital markets,
money markets, security markets, capital market development authority; the stock exchange:
terminologies, practices and functions, computation and interpretation of the stock index.

C. DETAILED COURSE OUTLINE

Week
Week 1-3

Subject area

Course Outline
& Introduction

Week 4

Week 5-6

Discussion
topics

- Essence of financial
institutions
- Role of financial markets in
resource allocation: lending,
payments and risk-bearing;
- Financial system: its
operation, efficiency, stability
and government intervention;

Assignments/Re
ading guide

Discussion and Term


Paper Assignment

Interest Rate
Markets

- determination of market
interest rates; portfolio theory

Foreign
Exchange
Markets
The Euro
Markets
Equity Markets

- Types of Foreign Exchange


Discussion &Exercises
securities
-Market for Foreign Exchange
-Meaning and importance of
Euro Markets
-Types of equity securities
-Market for Equity securities
- Capital Market Development
-Terminologies, practices and
functions, computation and
interpretation of the stock
index.

Stock Exchange

Discussion

-Role of Nairobi Securities


Exchange in facilitating the
trading of the above securities
Week 7
Week 8

Week 10

Week 11

CAT 1
Market for
Derivatives,
Futures,
Forwards,
Options,
Warrants and
Swaps
Regulation of
Financial
Markets

Financial
Institutions

Types of derivatives
Future Contracts
Forward deals
-Options and Warrants
Types of Swaps

Presentations & Exercises

-Role of government in
Money and Capital Markets
-Role of Central Bank of
Kenya in regulating
commercial banks
-Role of Capital Markets
Authority in regulating
Capital Markets
- central bank, commercial
bank, and other non-banking
institutions, merchant banks
and hire purchase companies
- Development Finance
Company of Kenya
-Industrial and Commercial
Development Corporation
(ICDC)
-Kenya Industrial Estates
-The Industrial Development

Discussion & Exercises

Handing in of Term
Paper.

Discussion & Exercises

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