FINBPPRA Principles of Finance

School of Business Administration in Karvina
Winter 2012
Extent and Intensity
2/1/0. 5 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ing. Irena Szarowská, Ph.D., MPA (lecturer)
Ing. Irena Szarowská, Ph.D., MPA (seminar tutor)
Guaranteed by
Ing. Irena Szarowská, Ph.D., MPA
Department of Finance and Accounting – School of Business Administration in Karvina
Prerequisites (in Czech)
K absolvování předmětu nejsou vyžadovány žádné podmínky a předmět může být zapsán nezávisle na jiných předmětech
Course Enrolment Limitations
The course is offered to students of any study field.
Course objectives (in Czech)
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
    2. Money and money theories
    3. Monetary policy
    4. Interest rates structure
    5. Interest rates in banking practice
    6. Classification of securities
    7. Equity securities
    8. Debt securities
    9. Classification of financial markets
    10. Stock exchanges and over-the-counter markets
    11. Financial institutions and financial services
    12. Depository financial institutions
    13. Non-depository financial institutions
    1. Financial system
    Financial system as a complex of financial instruments, financial markets and financial intermediaries. Lenders and borrowers. Transition of savings into investments. The financial system and the real economy. Information asymmetry.
    2. Money and money theories
    Concepts of money, role of money in economy, functions of money. Metalism, nominalism and quantitative theory of money. Money base, monetary aggregates. Types of money, banks and money. Money market and effect of money on economy.
    3. Monetary policy
    Monetary policy: definition, main aim and basic tools. Development and changes in monetary policy strategy and implementation. Transmission mechanism. Expansive and restrictive monetary policy. Central bank and its independence. Inflation targeting.
    4. Interest rates structure
    Level of interest rates, real and nominal interest rates, non-risk interest rate. Term structure of interest rates, yield curve, effect of inflation. Present and future value of cash flows. Valuation of financial assets. Risk and interest rate structure.
    5. Interest rates in banking practice
    Changes of interest rates, effect of changes on price of debt and equity securities. Interest rates in interbank money market. Interest rates of commercial banks. Interest rates of central bank.
    6. Classification of securities
    Characteristics of securities. Classification according to ownership, transferability, returns and yields received, process of issue, debt. Materialized and dematerialized securities. Securities law.
    7. Equity securities
    Shares, types of shares (ordinary, priority, employee). Operations involving shares (issue, split, employee stock program, stock option). Holder rights, returns and risk stemming from shares' ownership. Other equity securities - ADR, GDR, certificates.
    8. Debt securities
    Typology of bonds according to issuer, delivery date, risk, coupon payments. Government, company, municipal, banking bonds. Foreign bonds and eurobonds. Treasury bills, commercial papers, bills of exchange, depository certificates, repo operations.
    9. Classification of financial markets
    Primary and secondary market, equity market, bond market, money and capital markets, stock exchanges and OTC markets. Risk, performance, development and efficiency of financial markets. Trading in financial market and IT. Financial market participants. Derivatives.
    10. Stock exchanges and over-the-counter markets
    Stock exchange, mechanism of trading, role of stock exchange in economy. Trading settlement, insider trading. Regulation of stock exchanges and trading with securities. Price of securities. Price development indicators and indicies.
    11. Financial institutions and financial services
    Main participants in financial markets, direct and indirect securities, indirect financing, transaction costs and information costs. Depository and non-depository institutions. Determinants of current development in the financial sector and financial institutions.
    12. Depository financial institutions
    Banks and their position among other financial institutions. Banks' balance sheet, assets and liabilities. Main active and passive banking products and services. Saving banks, building societies, saving unions and mutual banks. Development of the Czech banking sector.
    13. Non-depository financial institutions
    Insurance companies, life and non-life insurance. Collective investment, mutual
Literature
    required literature
  • MADURA, J. Financial Markets and Institutions. 0-314-87735-5, 2008. ISBN 0-314-87735-5. info
  • STAVÁREK, D., POLOUČEK, S. The Financial Sector in the Enlarging European Union. (1st ed.). Newcastle: Cambridge Scholars Press, 2006. ISBN 1-84718-020-5. info
  • POLOUČEK, S. (ed.). Reforming the Financial Sector in Central European Countries. Houndmills, Basingstoke, Hampshire: Palgrave Mac, 2004. ISBN 1-4039-1546-6. info
    recommended literature
  • FABOZZI, F.J., MODIGLIANI, F., FERRI M.G. Foundations of Financial Markets and Institutions. New York: Prentice-Hall, 2010. ISBN 0-13-613531-5. info
  • CECCHETTI, S. Money, Banking and Financial Markets. . Boston etc.: McGraw-Hill Irwin, 2010. ISBN 978-0-07-337590-8. info
  • PARAMESWARAN, S.K. Financial Institutions, Instruments and Markets. New Delhi: Tata McGraw-Hill, 2007. ISBN 0-07-062083-0. info
  • MISHKIN, F., EAKINS, S.G. Financial markets and institutions. Boston: Addison Wesley, 2006. ISBN 978-0321-28029-9. info
  • SAUNDERS, A., CORNETT, M.M. Financial Markets and Institutions. A Modern Perspective. Boston etc.: McGraw-Hill, 2004. ISBN 0-07-282454-9. info
  • EAKINS, S.G. Finance. Investments, Institutions, and Management. Boston etc.: Addison Wesley, 2002. ISBN 0-201-72166-X. info
Teaching methods
Skills demonstration
Seminar classes
Assessment methods
Written exam
Language of instruction
English
Further comments (probably available only in Czech)
The course can also be completed outside the examination period.
Teacher's information
ActivityDifficulty [h]
Ostatní studijní zátěž66
Přednáška26
Seminář13
Zkouška40
Summary145
  • Enrolment Statistics (recent)
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