CRT LEARNING MODULE

Course Code: FIN01

Course Title: FINANCIAL MARKETS

Units: 3

Module Title: PROPERTIES AND PRICING OF FINANCIAL

ASSETS

FINANCIAL MARKETS Date Developed:

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ASSETS
HOW TO USE THIS DIGITIZED LEARNING MODULE

Welcome to the module in PROPERTIES AND PRICING OF FINANCIAL

ASSETS. This module contains training materials and activities for you to
complete this module. This module also covers the processes involved in
communication process, as well as its elements and salient features.

You are required to go through a series of learning activities in order to

complete each learning outcome of the module. Each of the learning outcomes
is provided with Modules. Follow these activities on your own and answer the
self-check at the end of each learning outcome. You may remove a blank
answer sheet at the end of each module (or get the answer sheets from the
online facilitator) to write the answers for each self-check. If you have
questions, don’t hesitate to ask your facilitator for assistance.

This module was prepared to help you gain fundamentals and basic
knowledge about communication processes. This will be the source of
Information for you to acquire knowledge and skill in this particular trade
independently and at your own pace, with minimum supervision of help from
your instructor.

 Talk to your online facilitator and agree on how you will both organize
the Training of this unit. Read each through the module carefully. It is
divided into sections, which cover all the skills and knowledge you need
to successfully complete this module.
 Work through all the information and complete the activities in each
section. Read Modules and complete self-check. Suggested references are
included to supplement the materials provided in this module.
 Most probably your facilitator will be your supervisor or manager. Your
online facilitator will support and correct you.
 Your online facilitator will tell you about the important things you need
consider when you are completing activities and it is important that you
listen and take notes.
 You will be given plenty of opportunity to ask questions and practice on
the job. Make sure you practice new skills during regular work shifts.
This way you will improve both your speed and memory and also your
confidence.
 Talk to more experienced workmates and ask for their guidance.
 Kindly the self-check questions at the LMS (EDMODO) to test your own
progress.
 When you are ready, ask your online facilitator to watch you online via
Zoom or Google Meet to perform the activities outlined in this module.
 Ask your online facilitator work through the activities: ask for written
feedback on your progress. Your online facilitator keeps feedback/pre-
assessment reports for this reason. When you have successfully

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 completed each element, ask the facilitator to mark on the reports that
you are ready for assessment.
 When you have completed this module, and feel confident that you have
sufficient practice, your online facilitator will arrange an appointment
with registered assessor’s to assess you. The results of your assessment
will be recorded in your competency Achievement Record.

College for Research & Technology of Cabanatuan

FINANCIAL MARKETS 01

Contents of this Learning Module

No. Module Title Topic Code

 ASSET/LIABILITY
PROBLEM Module 4
PROPERTIES  LIQUIDITY
AND PRICING CONCERNS
OF FINANCIAL  DEPOSITORY
4-5
INSTITUTIONS
ASSETS Module 5
 COMMERCIAL
BANKS
 BANK SERVICES
 CREDIT UNIONS

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 MODULE CONTENT

MODULE TITLE : PROPERTIES AND PRICING OF FINANCIAL ASSETS

MODULE DESCRIPTOR:

The module provides an overview of the financial information

sector and global financial markets, which constitute an important application
domain of computer science in the Greater London area. The module prepares
students with sufficient domain knowledge so that they can continue with
module COMPGS07 to learn and understand the functioning of the many kinds
of financial information systems used in this domain.

NUMBER OF HOURS:

3 hours a week/ 12 hours in a month

LEARNING OUTCOMES:

At the end of this lesson students are expected to:

1. Students will understand the characteristics of different financial

assets such as money market instruments, bonds, and stocks, and how to buy
and sell these assets in financial markets.

2. Understand the benefit of diversification of holding a portfolio of

assets, and the importance played by the market portfolio.

3. Identify how to apply different valuation models to evaluate fixed

income securities, stocks, and how to use different derivative securities to
manage their investment risks.

LEARNING OUTCOME #4-5: PROPERTIES AND PRICING OF FINANCIAL

ASSETS

Contents:

1. Public and Private Sector Institutional Participants:

2. Overview of Consumer, Corporate and Investment Banking Financial

Services:

3. The Factors Affecting Economic Cycles and Financial Institution Risk

Adjusted Returns:

4. Time Value of Money, Discounting, Nominal and Effective Yield

Measurement:

5. Capital Equilibrium between Issuer and Investor:

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 6. Capital Market Valuation and Measurement:

7. A Day in the Life of a Transaction:

8. Roles, Responsibilities and Controls of Deal Makers and Processing

Staff:

9. Cash and Derivative Instruments, Transaction Services, and Advisory

Assessment Criteria

1. Watch a video for enrichment ( The shape of things, Fibonacci

Sequence Documentaries) URL: https://www.youtube.com/watch?
v=w2JmEoV_V0o ; https://www.youtube.com/watch?v=4ToUaU4vPks

2. Solving Symmetries is given to practice the knowledge to study the

reasons and benefits of the occurrences of the symmetries in those
objects/organisms.

3. Decoding Nature’s Rule is also provided to describe the shape of an

object, then the students will try to figure out the possible reason or
explanation as to why they are shape the way they are.

4. Finding the Golden Ratio by creating a table to show the occurrence of

it between the first 30 Fibonacci numbers.

Conditions

The students must be provided the following:

1. Hard / soft copy of the course syllabus.

2. Access to the internet/mobile data

3. Notebook

4. Laptop/mobile phone

Assessment Method:

1. Written Assessment

2. Submission of Reflection Paper

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 Learning Activity (Study Guide)

1. Using EDMODO app or Google Classroom on your phone or laptop, go to the

Mathematics in the Modern world class provided by the assigned teacher.

2. Click on the FOLDERS section (on menu/library bar).

3. Click the folder PROPERTIES AND PRICING OF FINANCIAL ASSETS. The

digitized Modules, Task Sheets and Job Sheets are available in this folder.

4. The activity/ self – check for this topic is all contained in the folder
PROPERTIES AND PRICING OF FINANCIAL ASSETS.

Learning Outcome #4-5

1. PROPERTIES AND PRICING OF FINANCIAL ASSETS /Written Exercise

Learning Activity Special Instructions

Read Module No. 4-5- Inside the Folder, it contains the

(PROPERTIES AND PRICING
OF FINANCIAL ASSETS) in the
given FOLDER
(FINANCIAL MARKETS).
information about “PROPERTIES AND
PRICING OF FINANCIAL ASSETS”
Use the EDMODO app.

2. Answer the activity/self- The activity is available in the folder

check for Module 4-5. PROPERTIES AND PRICING OF
FINANCIAL ASSETS. (The activity is
timed (20 minutes). The result will be
immediately available after clicking
SUBMIT.

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 MODULE 4-5

PROPERTIES AND PRICING OF FINANCIAL ASSETS

Learning Objective: After reading this MODULE, you should be able to:
1. Students will understand the characteristics of different financial
assets such as money market instruments, bonds, and stocks, and how to buy
and sell these assets in financial markets.

2. Understand the benefit of diversification of holding a portfolio of

assets, and the importance played by the market portfolio.

3. Identify how to apply different valuation models to evaluate fixed

income securities, stocks, and how to use different derivative securities to
manage their investment risks.

FINANCIAL ASSET
A financial asset is a liquid asset that gets its value from a
contractual right or ownership claim. Cash, stocks, bonds, mutual
funds, and bank deposits are all are examples of financial assets.
Unlike land, property, commodities, or other tangible physical
assets, financial assets do not necessarily have inherent physical
worth or even a physical form. Rather, their value reflects factors of
supply and demand in the marketplace in which they trade, as well
as the degree of risk they carry.

PROPERTIES AND PRICING OF FINANCIAL

ASSETS
1. Moneyness - some financial asset used as a medium of
exchange or in settlement of transactions. Could be cash or
near money, such as time & savings deposits and Treasury
Bills.
Can asset be used as a medium of exchange, or easily
converted to money?
 money—yes
 checking account—yes
 Tbill--easily converted
 real estate—no

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2. Divisibility - relates to the minimum size in which a financial
asset can be liquidated and exchanged for money. The smaller,
the more divisible.
3. Reversibility - the cost of investing in a financial asset and
then getting out of it and back into cash again.
4. Bid ask spread - the most relevant component of round-trip
cost, which might be added commissions and the time and
cost, if any, of delivering the asset.
5. Thickness of the market - the prevailing rate at which buying
and selling orders reach the market. That is, the frequency of
transactions.
6. Thin Market - one that has few trades on a regular or
continuing basis.
7. Nominal expected return - the net real expected return after
adjustment for the loss of purchasing power (due to inflation)
8. Term to maturity - the length of the period until the date at
which the instrument is scheduled to make its final payment,
or the owner is entitled to demand liquidation.

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