Elements of Finance Class XI Syllabus HSEB/ NEB

Elements of Finance Class XI Syllabus 

Full marks:100  

I. Introduction

Finance is an emerging discipline. Traditionally finance was concerned with financial instruments and institutions only. But, the scope of finance has now been expanded to encompass areas like mathematics, statistics, working capital management, financial analysis, risk, insurance, and multinational finance. The role of finance in the company’s success has become paramount as all business decisions and activities of a business have financial implications. As such finance as a subject has found a prominent place as one of the functional areas of commerce education at the higher secondary level.

II. General Objectives

General Objectives of this course are to enable the students to understand concepts and principles of elementary finance as a foundation for higher-level education and to impart skills required for understanding financial market and institutions, corporate finance and insurance.

III. Specific Objectives

On completion of this course, the students shall be able to:

a. Describe the meaning and scope of business finance;

b. Explain the functions, types, role, and importance of financial institutions and financial markets;

c. Discuss and determine the various types of financial assets;

d. Learn the basic concept of interest and discounting factors. Involved in finance;

e. Explain the concept and types of risk of insurance;

IV. Contents and Unit Wise Teaching Hours

Units	Chapters	Teaching hours
1.	Overview of finance	10
2.	Financial markets	10
3.	Financial institutions	20
4.	Financial assets	15
5.	Interest	15
6.	Present value and Discounting technique I	15
7.	Present value and Discounting technique II	15
8.	Risk and insurance	20
9.	Life insurance	15
10.	Non-life insurance	15
	Total	150

I. Course Content

Unit 1: Overview of finance

Concept and importance of finance; the relationship of finance with economics and accountancy; the scope of finance: investment, corporate finance, financial institutions, and markets.

Unit 2: Financial Markets

Concept; types of financial markets: money and capital, primary and secondary markets; financial intermediaries: deposit institutions, insurance companies other financial institutions; investment bankers, mortgage bankers; the secondary market: organized exchanges and over-the-counter market.

Unit 3: Financial Institutions

Introduction and types of financial institutions, the role of a financial institution in financial markets; introduction, functions, and role of the central bank; commercial bank; development bank and other financial institutions; finance companies, finance cooperatives, mutual funds, pension, and provident fund.

Unit 4: Financial Assets

Real vs. financial assets; meaning and characteristics of financial assets; instruments of financial assets: long-term vs. short-term, ownership vs. creditorship and fixed vs. variable instruments; types of long term instruments: common stock, preferred stock and bonds; concept of par value, book value and market value of long term instruments and computation of book value of common stock; types and uses of short term instruments: treasury bill, bankers acceptance, commercial paper, promissory notes, bill of exchange, letter of credit, mutual funds, telebanking instruments. ATM, debit card, credit card, and electronic transfer

Unit 5: Interest

Concept of interest; nominal and real rate of interest, periodic and effective rate of interest, riskfree rate of interest; determinants of interest rate: inflation premium, default premium, maturity premium, liquidity premium; computation of interest rates.

Unit 6: Present Value and Discounting technique I

Future value and compounding: investing for a single period, investing for more than one period. 

Present value and discounting: the single-period case, the multi-periods case, loan amortization.

Unit 7: Present Value and Discounting technique II

Concept of cash flows: Even and uneven, the timing of cash flows. 

Future and present values of multiple cash flows: future value with multiple cash flows present value with multiple cash flows. 

Annuities and perpetuities: present values for annuity cash flows, future values for annuities, annuities due, perpetuities.

Unit 8: Risk and Insurance

Risk: concept, nature, cost, and management. Concept and evolution of insurance; functions of insurance; benefits of insurance; nature of insurable risks; the principle of insurance; features of the insurance contract; meaning, objectives, and methods of reinsurance.

Unit 9: life insurance

Concept and importance of life insurance; elements of the life insurance contract; procedures of affecting life insurance policy; the role of agents; computation of life insurance premium; types of life insurance;

Unit 10: Non-life insurance

Concept of non-life insurance; concept and importance, types of policy and procedures;

II. Instructional Procedures

· Lecture and discussion

· Case observation

· Field visit

· Library Assignment

· Project Work

· Group and Individual Work

· Presentation 

III. Assessment Techniques

• Written Examination 100 (100%)

Evaluation Scheme

Units	Title	Number of questions			marks allocated
		Th.	Pr.	Tot	Th.	Pr.	Tot
1.       1	Overview of finance	1		1	5		5
2.       2	Financial markets	1		1	5		5
3.       3	Financial institutions	2		2	15		15
4.       4	Financial assets	1	1	2	5	5	10
5.       5	Interest		1	1		10	10
6.       6	Present value and Discounting technique I		1	1		10	10
7.       7	Present value and Discounting technique II		1	1		10	10
8.       8	Risk and insurance	2		2	15		15
9.       9	Life insurance	1	1	2	5	5	10
10.  10	Non-life insurance	1		1	10		10
	Total	9	5	14	60	40	100