FIUBAPOF Principles of Finance

School of Business Administration in Karvina
Summer 2022
Extent and Intensity
2/1/0. 6 credit(s). Type of Completion: zk (examination).
Teacher(s)
prof. Ing. Daniel Stavárek, Ph.D. (lecturer)
Ing. Irena Szarowská, Ph.D., MPA (lecturer)
Ing. Irena Szarowská, Ph.D., MPA (seminar tutor)
Guaranteed by
prof. Ing. Daniel Stavárek, Ph.D.
Department of Finance and Accounting – School of Business Administration in Karvina
Contact Person: Ing. Irena Szarowská, Ph.D., MPA
Prerequisites
The completion of the course does not require any conditions and the course can be enrolled independently of other courses
Course Enrolment Limitations
The course is only offered to the students of the study fields the course is directly associated with.
fields of study / plans the course is directly associated with
Course objectives
The goal of the course is to explain basic principles of finance and features of financial system. The course is an introductory course for all economic majors. It covers topics as a conception of money and functions of money, a position and role of financial institutions, financial instruments, and financial markets in a financial system. It considers specific conditions of the Czech Republic transition onto a market economy and recent changes in European Union, respectively in the process of European monetary integration.
Syllabus
  • 1. Financial system
    Financial system as a complex of financial instruments, financial markets and financial intermediaries. Functions of financial system. Transition of savings into investments. Lenders and borrowers. Types of financial systems. M-system, B-system. Cross-country comparison. The financial system and the real economy. Financial system regulation. Information asymmetry.
    2. Money
    Concepts of money, role of money in economy, functions of money. Types of money. Evaluation of money. Banks and money. Monetary base, money supply, monetary aggregates. Money multiplier. Process of money multiplication. Deposit multiplier. Money market and effect of money on economy. Theory of money and main differencies in theories of money.
    3. Monetary policy
    Definition of monetary policy, its aims. Development and changes in monetary policy strategy. Implementation of monetary policy. Transmission mechanism of monetary policy. Instruments of monetary policy. Types of monetary policy. Expansive and restrictive monetary policy. Central bank and its independence. Principles of inflation targeting.
    4. Interest rates
    Basics of interest rates. Interest and interest rate. Real and nominal interest rates. Fisher effect. Determinants of interest rates. Term structure of interest rates, normal and inverted yield curve, effect of inflation. Risk and interest rate structure. Interest rates in banking practice. Interest rates of central bank. Interest rates of commercial banks. Time value of money. Present and future value of cash flows.
    5. Securities
    Financial instruments, importance of securities. Materialized and dematerialized securities. Money market instruments. Capital market instruments. The basics of equity and debt securities. Shares, types of shares, operations involving shares. Holder rights, returns and risk stemming from shares' ownership. Bonds, types of bonds, operations involving bonds. Returns and risk stemming from bonds' ownership. Treasury bills, commercial papers, bills of exchange. Yield of securities. Bonds and shares evaluation.
    6. Financial markets
    Classification of financial markets. Description of primary and secondary market, equity market, bond market, money and capital markets, stock exchanges and OTC markets. Financial market participants. Risk, performance, development and efficiency of financial markets. Trading in financial market. Derivatives. Market capitalization, index. Auctions.
    7. Financial institutions
    Definition of financial institutions. Classification of financial institutions. Description of depository and non-depository institutions. Banks and their position among other financial institutions. Saving banks, building societies, saving unions and mutual banks. Insurance companies. Collective investment, mutual funds, investment companies, investment funds, investment banks. Pension funds.
Literature
    required literature
  • MADURA, J., 2017. Financial Markets and Institutions. 12th ed. Boston: Cengage Learning. ISBN 9781337099745.
  • MISHKIN, F., 2019. The Economics of Money, Banking, and Financial Markets, Global Edition. London: Pearson Education Limited. ISBN 9781292268859.
    recommended literature
  • CECCHETTI, S. a K. L. SCHOENHOLTZ, 2016. Money, Banking and Financial Markets. 5th ed. Boston.: McGraw-Hill. ISBN 9781259746741
  • MISHKIN, F. S. a G. EAKINS, 2018. Financial Markets and Institutions. Global Edition, 9/E. Harlow: Pearson. ISBN 9781292215006.
  • VINEY, C. a P. PHILLIPS, 2015. Financial Institutions, Instruments & Markets. 8th ed. Sydney: McGraw-Hill Australia. ISBN 9781743079959
Teaching methods
Lectures Seminar classes Readings Class discussions Skills demonstration
Assessment methods
Ongoing test, written assignments, discussion, final written exam
Language of instruction
English
Further comments (probably available only in Czech)
Study Materials
The course is taught each semester.
Teacher's information
Evaluation: ongoing test (25%), written assignments (15%), written exam (60%)

Aktivity Náročnost [h]
Ostatní studijní zátěž 66
Přednáška 26
Seminář 13
Zkouška 40
Celkem 145
The course is also listed under the following terms Winter 2021, Winter 2022, Summer 2023, Winter 2023, summer 2024.
  • Enrolment Statistics (Summer 2022, recent)
  • Permalink: https://is.slu.cz/course/opf/summer2022/FIUBAPOF