Time Schedule:
Alan C. Hess
FIN 423
Seattle Campus
Role of banks and nonbank financial institutions in the financial system; asset choices of banks and nonbank financial institutions; problems in the management of financial institutions with emphasis on commercial banks. Prerequisite: FIN 350; either B ECON 300 or ECON 300; may not be repeated.
Class description
Components of the spread between a bank's loan rate and its deposit rate. The risks that banks manage including credit risk, interest rate risk and liquidity risk. How to hedge risk using forwards, futures, and swaps.
Student learning goals
General method of instruction
Socratic method. I ask lots of questions of specific students
Recommended preparation
Most of the test questions are in the Course Pak and the chapter in the text book. If you answer them all you will do well.
Class assignments and grading
Do the problems and questions. They are primarily analytical. We also use a spread sheet to implement a discounted cash flow model to decide whether to make a bank loan.
Four tests. The highest student gets a 4.0. Everyone else's grade is based on their test score relative to the highest test score.
