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TREASURY AND FUNDS MANAGEMENT

Before Mid-Term:

Function of Treasury Objective of Investment Banking Bank Investment versus Advances Fixed Investment

o Bonds, Price of Bondso Market Yield vs. Coupon Rateo Zero-Coupon Bonds

Net Assets Value formula Value at Risk (VAR) definition and calculations

o Individual stocko Portfolio stock

Standard deviationo Disadvantage

Types of Investments (Sukuk, T-Bills, Foreign Currency Bonds, TFCs, Open End Mutual Funds,Euro Bonds, Credit Link Notes)

Currency Risk Managemento Translation risk (definition and calculations)o Transaction risko Economic risk

HANDOUT=Understanding Yield Spreads (pg67, 68, 71, 72, 75)o Discount Rateo Open Market Operationso Bank Reserve Requirements (Cash Reserve Ratio, Statutory Liquidity Ratio)o Credit Policy

Yield Curveso Risingo Decliningo Flato Humped

Liquidity Premium (pg 69 only) Bootstrapping Spot Rate (Definition and Numerical) Crowding out effect Strategies to save tax

o Tax Evasiono Tax Avoidance

Yield Tax Exempt=Yield Taxable * (1-T) Mutual Funds

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After Mid-Term:

Delta (Call and Premium) Hedging (Definition) Dynamic Hedging Beta (listed and unlisted companies) How to calculate fair value? (just headings)

o Free Cash Flowo Discount Dividend Modelo Residual Modelo Relative Comparison

Funds of Fundso Advantage and Disadvantage

Purchasing Power Parity (definition) Interest Rate Parity (definition) Law of one price (definition and calculations) Identify whether currency is traded at discount or premium Fixed Investment Bonds ICH Equity Issue Behavioral Finance

o Loss Aversiono Over Confidenceo Anchoring

Concept of Cannibalization (Seasonal Impact) Types of return (objective)

o Preservationo Appreciationo Total return = dividend and capital gain

Small, large and mid capo SML and CML (definition, graph, calculations, differences) Market/global portfolioo Holding risk premium HPR

Alpha=mispriced return HANDOUT=THE FOREIGNN EXCHANGE MARKET (pg226-236,238--241)

o The foreign exchange market Interbank foreign exchange market Spot market Forward market Currency swap markets

o The spot market Bid-ask spreads

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Conditions of spread (market, bank/dealer position, trading volume, maturity offorward contracts)

Cross rates Bid-ask spreads for cross rates Currency arbitrage Triangular arbitrage with bid-ask spreads

o The forward market Background information on forward contracts Covered interest arbitrage

HANDOUT (TFM-PARTICULARS) (first page, 246-253) (full handout)o Particulars of TFM on financial statemento Types of real estate investments

Outright ownership Leveraged equity position Mortgages Aggregation vehicles

o Methods to value real estate (definitions and calculations) Cost method Sales comparison method Income method Discounted after-tax CF model

o Stages of venture capital investingo Venture capital investments characteristicso Calculations-NPV for a venture capital opportunityo Hedge funds