John Molson School of Business

Department of Finance
COMM 220 - Analysis of Markets
Winter 2020 Section G

General Information
Class time and location: Tuesdays & Thursdays 11:45 to 1:00 in MB 2.210

Course instructor: Ahmed Eissa, PhD

Office location: MB-12-222

Email: [email protected] (please write COMM220 at the start of subject

line)

Office hours: Tuesdays & Thursdays 1:00 to 2:30 or by appointment

Course Description
This course provides a general perspective on the history, operation and relationships between
Canadian and international product, labour and financial markets. Specifically, students will be
introduced to issues of fundamental importance to today’s managers and entrepreneurs such as
changes in structure and competitiveness in these markets in response to government policies, the
determination and behaviour of interest rates, inflation, market integration, and the role and function of
financial intermediation. It further provides students with the knowledge of the role and impact of
regulation and other government interventions in these markets.

Prerequisite: COMM 210, 215; ECON 201 or equivalent; ECON 203 or equivalent previously or
concurrently.

Learning Objectives
COMM 220 builds upon the pre-requisite micro- and macro-economic courses students have previously
taken and develops an integrated conceptual framework for the economic analysis of the relationships
between firms, consumers, and the economic environment in which they operate. This course provides
the necessary foundations for courses in areas of Finance, Management, Accounting, Marketing, and
Entrepreneurship. The course objective is to provide students with an understanding of the key
economic concepts used in the analysis of markets as well as the ability to draw upon these in
application.

After studying this course students should be able to explain and illustrate

 How a competitive market works and how supply and demand determine the prices and
quantities of goods and services.
 The effect of government policies and the resulting impact on consumers and producers.
 What the labour market does and how it works.
 The firm’s profit-maximization and cost-minimization processes.
 People’s preferences toward risk and the ways that people can compare and choose among
risky alternatives.
 The basic function and effects of financial markets and financial intermediaries on the economy.
 How asymmetric information problems interfere with the efficient functioning of financial markets
and how government regulation and financial intermediaries can lessen asymmetric information
problems.
 The factors that cause interest rates to change.
 The movement of short-term interest rates in the future using the yield curve.
 The elements of international economic integration.
 The gains from trade and the concepts of absolute advantage, comparative advantage, and
competitiveness.
 The factors that cause exchange rates to change and the interest rate parity condition.

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Required Textbook
Etext COMM 220 Analysis of Markets for Concordia University
Edition: 4
ISBN: 978-0-13-650558-7
Publisher: Pearson

Course Evaluation
The final grade for the course will be based on the following components:
Two In-Class Tests @10% each 20%
Midterm Exam 30%
Final Exam 50%
Total 100%

No make-up test or midterm will be allowed. If you are unable to write a test or the midterm for a
valid and documented reason, you must notify me before the test/midterm and provide the
documentation (i.e., the original of your doctor's note) within seven days of the test/midterm and the
test/midterm weight will be added to the final exam. Otherwise, you will receive a zero for the
test/midterm.
The tests/exams are closed book. Only non-programmable calculators are permitted. All electronic
devices (e.g., cell phones, laptops, etc.) must be turned off and deposited at the front or rear of the
classroom during the test/exam. A student will need a minimum of 40% in the final exam and an
overall minimum of 50% to pass the course. Students cannot write a 100% final.

Exam Date Chapters

In-Class Test 1 Feb 4 (Tuesday) 1, 2, 3
Midterm Feb 23 (Sunday 18:00–20:30) 1, 2, 3, 4, 5
In-Class Test 2 Mar 26 (Thursday) 6, 7, 8, 9, 10, 11
Final To be announced (Apr 16 – May 3) Cumulative

I collect and keep all the tests/exams. Please email me for an appointment to review your test/exam. If
you have questions about the grades, please convey them to me in writing.

Letter Grades and Numerical Scores

Letter Score Letter Score Letter Score Letter Score
A+ 90 – 100 B+ 77 – 79 C+ 67 – 69 D+ 57 – 59
A 85 – 89 B 73 – 76 C 63 – 66 D 53 – 56
A- 80 – 84 B- 70 – 72 C- 60 – 62 D- 50 – 52
FNS < 50
* D- is the minimum requirement to pass the course.

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Class Schedule
The schedule may change depending on class progress; any changes will be announced in class.
You are expected to read the assigned chapter(s) before coming to class.

# of Lectures
Textbook Topic(s)
and Date(s)

Chapter 11 Preliminaries
1.1 The Themes of Microeconomics
1
1.2 What is a Market?
Jan 7
1.3 Real versus Nominal Prices
1.4 Why Study Microeconomics?

Chapter 2 The Basics of Supply and Demand

2.1 Supply and Demand
2.2 The Market Mechanism
3 2.3 Changes in Market Equilibrium
Jan 9,14,16 2.4 Elasticities of Supply and Demand
2.6 Understanding and Predicting the Effects of Changing Market
Conditions
2.7 Effects of Government Intervention – Price Controls
Chapter 3 The Analysis of Competitive Markets
3.1 Evaluating the Gains and Losses from Government Policies –
Consumer and Producer Surplus
3 3.2 The Efficiency of a Competitive Market
Jan 21,23,28 3.3 Minimum Prices
3.4 Price Supports and Production Quotas
3.5 Import Quotas and Tariffs
3.6 The Impact of a Tax or Subsidy

Chapter 4 Overview of the Labor Market

1  The Labor Market: Definitions, Facts, and Trends
Jan 30  How the Labor Market Works
 Applications of the Theory

Feb 4 Class Test 1

1 Only section 1.3 will be covered in class. However, you are expected to read the entire chapter so that you are familiar
with the concepts used in the analysis of markets. If you have trouble with any of the concepts, please feel free to meet me
during office hours.

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# of Lectures
Textbook Topic(s)
and Date(s)

Chapter 5 The Demand for Labor

 Profit Maximization
 The Short-Run Demand for Labor When Both Product and Labor
Markets Are Competitive
 The Demand for Labor in Competitive Markets When Other Inputs Can
be Varied
3
 Policy Application: The Labor Market Effects of Employer Payroll Taxes
Feb 6,11,13 and Wage Subsidies

Appendix Graphical Derivation of a Firm’s Labor Demand Curve

5A  The Production Function
 Demand for Labor in the Short Run
 Demand for Labor in the Long Run

Chapter 6 Supply of Labor to the Economy: The Decision to Work

2  Trends in Labor Force Participation and Hours of Work
Feb 18,20  A Theory of the Decision to Work
 Policy Applications

Feb 23 (Sun) Midterm Exam Time: 18:00–20:30 Venue: TBA

Chapter 7 Uncertainty and Consumer Behavior

7.1 Describing Risk
2
7.2 Preferences Toward Risk
Mar 3,5
7.3 Reducing Risk
7.4 The Demand for Risky Assets

Chapter 8 An Overview of the Financial System

 Function of Financial Markets
 Structure of Financial Markets
1  Financial Market Instruments
Mar 10  Internationalization of Financial Markets
 Function of Financial Intermediaries: Indirect Finance
 Types of Financial Intermediaries
 Regulation of the Financial System

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# of Lectures
Textbook Topic(s)
and Date(s)

Chapter 9 An Economic Analysis of Financial Structure

 Basic Facts about Financial Structure Throughout the World
 Transaction Costs
1  Asymmetric Information: Adverse Selection and Moral Hazard
Mar 12  The Lemons Problem: How Adverse Selection Influences Financial
Structure
 How Moral Hazard Affects the Choice Between Debt and Equity
Contracts
 How Moral Hazard Influences Financial Structure in Debt Markets

Chapter 10 The Meaning of Interest Rates

1  Measuring Interest Rates
Mar 17  The Distinction between Interest Rates and Returns
 The Distinction between Real and Nominal Interest Rates

Chapter 11 The Behaviour of Interest Rates

 Determinants of Asset Demand
 Supply and Demand in the Bond Market
1  Changes in Equilibrium Interest Rates
Mar 19  Supply and Demand in the Market for Money: The Liquidity Preference
Framework
 Changes in Equilibrium Interest Rates in the Liquidity Preference
Framework
 Money and Interest Rates
Chapter 12 The Risk and Term Structure of Interest Rates
1
 Risk Structure of Interest Rates
Mar 24
 Term Structure of Interest Rates

Mar 26 Class Test 2

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 Chapter 13 An Introduction to the World Economy
 Introduction: International Economic Integration
 Elements of International Economic Integration

Chapter 14 Comparative Advantage and the Gains from Trade

2
Mar 31  Introduction: The Gains from Trade
Apr 2  Comparative Productivity Advantage and the Gains from Trade
 Absolute and Comparative Productivity Advantage Contrasted
 Gains from Trade with No Absolute Advantage
 Comparative Advantage and “Competitiveness”
 Economic Restructuring

# of Lectures
Textbook Topic(s)
and Date(s)

Chapter 15 Exchange Rates and Exchange Rate Systems

 Introduction: Fixed, Flexible, or In-Between?
 Exchange Rates and Currency Trading
2  The Supply and Demand for Foreign Exchange
Apr 7,9  The Real Exchange Rate
 Alternatives to Flexible Exchange Rates
 Choosing the Right Exchange Rate System

Appendix The Interest Rate Parity Condition

Final Exam (Apr 16 – May 3)

Important Dates
Jan 20 (Monday): Deadline for withdrawal from the course with tuition refund (DNE)
Mar 23 (Monday): Last day for academic withdrawal from the course without tuition refund (DISC)

Tutorials
There will be three tutorials each week starting Jan 9, 2020. Any change to the schedule will be posted
in the “COMM 220 All Sections” course on Moodle.
Day Time Location 1st Tutorial Last Tutorial
Thursdays 20:30–22:30 MB 1.210 Jan 9 Apr 9
Saturdays 12:00–14:00 MB S2.210 Jan 11 Apr 4
Sundays 12:00–14:00 MB S2.210 Jan 12 Apr 5

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The tutorials will use material that is not available in the textbook and give review prior to test/exam.
Attending tutorials is not mandatory. However, you are strongly encouraged to attend at least one
tutorial per week.
Please note that private tutorial companies, some of whom aggressively promote their services on and
off campus, are not authorized by Concordia University to distribute flyers on University premises and
may not use Concordia University facilities to promote or provide their services.
Concordia University and its academic departments do not have any affiliation with these companies
even though names such as JMSB, Concordia, or references to specific departments often appear in a
visible way on some flyers. If you are interested in the University’s approved tutoring services, all you
need to do is ask your professor or consult the services listed in your course outline.

Assessment of Learning Objectives

The learning objectives are assessed through class tests, midterm and final examinations.

Learning
Learning Activity Midterm
Class Tests Final Exam
Objective Exam

Explain and illustrate how a competitive market

works and how supply and demand determine Theory and
the prices and quantities of goods and services
algorithmic-
Explain and illustrate the effect of government
policies and the resulting impact on consumers type multiple-
and producers choice and
Explain and illustrate what the labour market exam
does and how it works
questions Theory and
Explain and illustrate the firm’s profit- Theory and
algorithmic-
maximization and cost-minimization processes algorithmic-
type multiple-
Explain and illustrate people’s preferences type multiple-
toward risk and the ways that people can choice and
compare and choose among risky alternatives choice
exam
Explain the basic function and effects of financial questions
markets and financial intermediaries on the questions
economy
Explain how asymmetric information problems
interfere with the efficient functioning of financial
markets and how government regulation and
financial intermediaries can lessen asymmetric
information problems
Explain and illustrate the factors that cause
interest rates to change

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 Explain and illustrate the movement of short-term
interest rates in the future using the yield curve

Explain the elements of international economic

integration
Explain and illustrate the gains from trade and
the concepts of absolute advantage, comparative
advantage, and competitiveness
Explain and illustrate the factors that cause
exchange rates to change and the interest rate
parity condition

Moodle
We will use Moodle to facilitate interaction. To access our Moodle course, open your browser and log
in to the MyConcordia Portal using your Concordia netname and password. You will find our Moodle
course appear in the My Moodle Courses section. Problems should be directed to [email protected].

Student Responsibilities
You are strongly advised to attend all the classes. Read the assigned material before coming to class
and be prepared to participate in class discussions. Please understand that the class time is very limited
and the material to be covered is very extensive; it is impossible to go over or even mention everything
in class. Therefore, it is crucial that you read the assigned chapters and do the end-of-chapter problems
on your own. If you have any questions, you can come and discuss them with me during office hours.
You are responsible for what is covered in class and any absence on your part leaves you
responsible for finding out what was presented in class.

Classroom Discipline
It is important to observe silence and respect your classmates’ right to hear and benefit from what is
being said during class. Please turn your cell phones to silent mode and do not use them in class.
Laptops are allowed in the classroom provided they are being used to take notes or for other class-
related activities. A student who distracts attention of other students by consistently talking in classes
will be asked to leave the room. For a second offence, the penalty will be 15% off her/his final grade
for the course.

Academic Integrity
The Academic Code of Conduct states that “The integrity of University academic life and of the degrees,
diplomas and certificates the University confers is dependent upon the honesty and soundness of the
instructor-student learning relationship and, in particular, that of the evaluation process. Therefore, for
their part, all students are expected to be honest in all of their academic endeavours and relationships
with the University.” (Academic Code of Conduct, Article 1)

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All students enrolled at Concordia are expected to familiarize themselves with the contents of this Code.
You are strongly encouraged to read the pertinent section in the Concordia Undergraduate Calendar at
http://www.concordia.ca/academics/undergraduate/calendar.html, and visit the following web address:
http://www.concordia.ca/students/academic-integrity.html, both of which provide useful information
about proper academic conduct.

Policy on Copyright Compliance

As in all Canadian universities, members of the Concordia community are users of copyrighted materials
and, as such, are subject to copyright legislation. The necessity of complying with the Copyright Act is
not open to question.
This Policy deals with the responsible use of copyrighted materials by members of the University. Its
objective is to ensure copyright compliance in accordance with federal legislation, thus protecting the
rights of creators and the interests of the University’s faculty members, staff and students.
This Policy applies to all members of the University (faculty, staff and students). Compliance with the
Copyright Act and this Policy is the responsibility of each member of the University. Failure to comply
with the Copyright Act is a violation of federal legislation. In addition to any action that may be taken by
any copyright owner, its licensing agent or the police authorities, the University reserves the right to take
disciplinary or other action against a member with respect to any breaches of this Policy.

Policy on Audio and/or Video Recording of Lectures

Taking notes of classroom lectures and discussions can be an aid to comprehension and retention of
the material. As such, this forms part of the recognized and accepted practice of students. The
University also recognizes that there are valid personal and academic reasons for allowing and using
lecture recordings as study tools.
This Policy sets out the rules and regulations surrounding the recording of lectures by students and
staff. This Policy applies to all members of the University community.
Students shall not make any recording (audio or video) of a classroom lecture without having
obtained the prior written permission from the instructor. Permission to record may be granted to
a student at the discretion of the instructor and normally for the sole purpose of accommodating a
student’s particular needs and only for the purpose of private study. Students who have obtained
permission to record a lecture must do so in a manner which ensures the privacy of other students
present. Students who have obtained permission to record a lecture shall respect all related intellectual
property rights in accordance with applicable laws and the University’s Policy on Copyright Compliance.
Recordings of lectures made by students shall not be shared, reproduced or uploaded to any
publically accessible web environment or used for any purpose not specifically authorized by
the instructor. Recording of lectures shall not be made, used, distributed for any commercial purposes
or compensation. Students who have access to authorized recorded lectures (ex: via Moodle) may use
such recordings only for personal or group study and shall not reproduce, share or upload the recording
to any publically accessible web environment. Any violation of this Policy shall be treated as a violation
of the applicable University policy, such as the Code of Rights and Responsibilities and the Academic
Code of Conduct.

Support Services

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Concordia University offers many on-campus support services that are available to help students
achieve academic and personal success.

LIST OF STUDENT SERVICES

1. Undergraduate Academic Advising: JMSB Undergraduate Academic Advising
2. Counselling and Psychological Services: concordia.ca/students/counselling-life-skills
3. Concordia Library Citation and Style Guides: library.concordia.ca/help/howto/citations.html
4. Student Success Centre: concordia.ca/students/success
5. Health Services: concordia.ca/students/health
6. Financial Aid and Awards: concordia.ca/offices/faao
7. HOJO (Off Campus Housing and Job Bank): concordia.ca/students/international/hojo
8. Academic Integrity: concordia.ca/students/academic-integrity
9. Access Centre for Students with Disabilities: concordia.ca/offices/acsd
10. Student Advocacy Office: concordia.ca/offices/advocacy
11. Dean of Students Office: concordia.ca/offices/dean-students
12. International Students Office: concordia.ca/students/international
13. Student Hub: concordia.ca/students

Disclaimer
The instructor reserves the right to change or update this outline, and any other course related materials,
as required. The student will be informed in a timely manner through announcements during class
and/or on Moodle.
In the event that the University is unable to provide services or that courses are interrupted due to
events beyond the reasonable control of the University, including classroom disruptions, the University
reserves the right to modify any element contained in the course outline including but not limited to the
grading scheme and the weight accorded to exams or assignments.

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