Dr. P.V. Viswanath



Economics/Finance on the Web
Student Interest

  Courses / FIN 301 /  

FIN : Market Microstructure Summer 2005

Classes will meet in room W524 on the New York campus
Email: pkadiyala@pace.edu Tel: (914) 773-3610
Email: pviswanath@pace.edu Tel: (212) 618-6518
Webpage: http://www.pviswanath.com
Blackboard: http://blackboard.pace.edu

Office Prof. P.V. Viswanath: W486, Pace New York
Office hours: Tuesdays and Thursdays, 11:45 a.m. to 12:30 p.m., 3:40 to 5:35 p.m. and by appointment
Note:  I am in my office most of the week; send me e-mail, give me a call or just drop by!

Course Description

This course on American capital markets starts with a description of the primary market, the process by which new securities are sold to the investing public. The characteristics of the major categories of publicly traded securities are discussed with an emphasis on the tradeoff between a security s risk and its return. A well functioning capital market requires a transparent, orderly system to handle trades between investors in these publicly held securities. The second half of the course compares and contrasts various trading systems put in place by major US exchanges. The course culminates with a discussion of the globalization of trading mechanisms.

Course Objectives

When you have completed this course successfully, you will be familiar with:

When you have completed the course successfully, you should be able to do the following (time permitting):

Course Text

Main Text: Trading and Exchanges, by Larry Harris, Oxford University Press, 2003
Supplementary Text: Robert Schwartz and Reto Francioni, “Equity Markets in Action: The Fundamentals of Liquidity, Market Structure and Trading,”, Wiley Trading Press, 2004

Computer Use and E-mail Policy:

You should obtain a Pace e-mail address as soon as possible, so that I can send you e-mail. Any student's Pace e-mail address can be obtained by going to http://appserv.pace.edu/WhitePages/Students.cfm or by going to the main Pace Home Page and clicking on White Pages from the IntraPace section towards the bottom of the page (the default password is the studentís Pace Identification Number).  More information about e-mail address, etc. can be obtained from the DoIT website and clicking on Computer from the left-hand side menu panel.  Even if you have another e-mail address where you wish to get your e-mail, you should still get a Pace e-mail address.  Once you have your Pace e-mail account and password, you can go to the Pace University Student E-Mail Server at http://stmail.pace.edu and have your e-mail forwarded to your preferred e-mail address.  You can find information on how to have your mail automatically forwarded at the DoIT websiteThe only way that I can communicate with you is through your Pace e-mail account.  So please get your Pace account information as soon as possible.

Check your e-mail and the FIN 301 website on a regular basis.  This will enable you to get the maximum from the course. I am available for consultation by e-mail at pviswanath@pace.edu. I check my e-mail practically every day, and, in most cases, you should get a speedy response to any questions.  

We will also be using Blackboard as a gateway for some aspects of the course.  Please log in to Blackboard at the earliest opportunity.    Blackboard login procedures can be found on the appropriate Blackboard site.  Essentially, your login ID for Blackboard will be your email ID, and your password will be your 9-digit social security number.  

Course Requirements

Class Attendance and Participation

Class attendance is mandatory and is highly recommended.  This is for two reasons: one, I believe that you will understand the material much better if you attend the class sessions; two, modifications to the class schedule will be announced in class and/or on the BlackBoard website.  Also, on occasion, I conduct classroom exercises, give short quizzes, or assign additional work. If you miss a class session during which we have such a classroom exercise, or additional work is assigned, your grade will be adversely affected for this reason as well.  (Of course, it goes without saying that missing quizzes will affect your grade adversely.)  In any case, you should consult fellow students on what was done during the class time that you missed, and collect handouts for that day's session. You should also bring a calculator to all class meetings.

I also require that you read the Wall Street Journal and/or the business section of the New York Times on a regular basis. Some exam questions will be based on current newspaper and magazine articles that are related to course material. Hence you should cultivate and improve your ability to read newspaper articles critically.  If you do not already subscribe to the Wall Street Journal, you can do so online from the FIN 301 Home Page.

There are two other reasons why you should try to attend as regularly as possible. One, classroom participation will help your grade. By participation, I mean answering questions and making intelligent comments. Two, we will sometime do learning exercises in class; doing them can help you substantially in understanding the material.  I often also give credit for participation in these classroom exercises.


Assignments are required to be handed in. Please see Course Timetable.

Academic Integrity

Any student taking this course is presumed to agree to abide by the statement on academic integrity, as described on pages 62-63 of the 2000-2002 Undergraduate Catalog.  It is your responsibility to get a copy of this catalog, which can be obtained from Lubin Undergraduate Academic Advisement.

Disability Policy

If you have a disability for which you are or may be requesting an academic accommodation, you must register with the Coordinator of Services for Students with Disabilities. You can contact the coordinator at 212-346-1526 in New York and 914-773-3710 in Westchester.


There will be a midterm exam and a final. Exams are closed book, but I will allow you to bring in one 8.5" x 11" sheet of paper containing only formulas -- nothing else (two sides). More details on the nature of the exams can be found on the FAQ page.  If you miss an exam without being excused, I cannot give you any credit for that exam.  University policy allows make-ups only for serious personal illness or death in the family, for which documentation may be required.  You can look at past exams and solutions on my website; however, the actual format of the exams this term will differ substantially from those of other exams. Furthermore, this is only the third time that I am using the Brealey, Myers and Marcus text; hence you may find it difficult to extrapolate from past exams in other courses. Please bring your own calculators to the exams; PDAs, however, are not allowed.  Get in touch with me regarding any question you may have regarding the exams, or the course in general.

Short Quizzes

There will probably be two or three short quizzes.  There will be two kinds of questions on these quizzes - one, definitions and two, short questions.  These quizzes will be closed-book.  Please treat these quizzes seriously because they will be good preparation for the midterm and the final; part of those exams will resemble the questions on the quizzes. However, I might change the nature of the quizzes based on what I feel is necessary and appropriate for the class; changes will be announced in class, in any case.

Media Articles

On my webpages, you will find recent media articles.  From time to time, I will add to this list.  There are several reasons why you should look regularly at these pages.  

  • I will be posting interesting and recent articles to this directory.  As such, it will be a useful way for you to keep abreast of topical issues (in addition to your regular perusal of the Wall Street Journal.)
  • I will pose questions on the subject matter of several of the articles.  These questions will be good preparation for the media article based questions on the exams.
  • You can draw on the articles for classroom discussions.
  • These articles and the appended questions are useful preparation for job interviews.

The password, necessary to access the Media Articles section, will be announced in class and can also be found at the Blackboard website. In case of emergency, you can contact me for the password.


Your final grade will be determined as follows:

Factor  Impact on grade
Midterm 30%
Final 40%
Short Quizzes 20%
Class Attendance, Assignments and Participation 10%

Letter grades will be assigned as follows:  

Course Grade Quantitative Class Score
A, A- 90%-100%
B+, B, B- 80%-89.99%
C+, C 70%-79.99%
C-, D+, D 60-69.99%
F 0-59.99%

Note that the minimum and maximum quantitative scores for plus and minus refinements to the letter grades will be at my discretion. These will be partly determined by the distribution of student scores within each letter grade category.   I place a high value on effort; at my discretion, I will raise your grade one notch if I feel that you have tried hard to satisfy all the requirements of the course.


Students must have satisfied the prerequisite for this course, viz. ACC 204 and ECO 105 and MAT 104 and MAT 117. Students must also have junior standing. I will presume complete familiarity with all topics taught in the courses listed above.

Data Cards

On the index card handed out in class, please fill in the information requested below.  Make sure to number the item that you are responding to.

  1. Name
  2. Home and Work Phone number; Fax number, if any
  3. Email address, other than at pace.edu (for my convenience).  (Note that I will send you email only to your Pace email address)
  4. Functional expertise/interest in business administration (e.g. accounting, finance, personnel administration)
  5. Work experience, if any (provide particulars of what your duties were)
  6. Previous knowledge of finance (if any)
  7. Interests outside of business management (such as languages, music, etc.)
  8. What spreadsheet program do you know? Where did you learn it, and when?