This unit introduces students to the Australian financial system, its operations and participants through an analysis of financial markets and institutions and how participants in the financial system interrelate. Students will learn about the functions of major financial institutions such as banks, non-banks, finance companies, building societies, credit unions, superannuation funds, life and insurance companies and funds management companies.

Students will examine the structure and operation of financial markets for equity and debt instruments, foreign exchange, futures, options and swaps. Further, coverage of regulators, regulations and the Reserve Bank of Australia is included. Specific topics examined include pricing of financial instruments, behaviour of interest rates, term and risk structure of interest rates, exchange rates, interest rate parity conditions; and the globalisation of financial markets.