Course syllabus FT - Financial Markets (ŠAVŠ - SS 2018/2019)

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Course title:
Financial Markets
SS 2018/2019
Course supervisor:
Supervising department:
Prerequisites for registration:
Time allowance:
full-time, 3/0 (hours of lectures per week / hours of seminars per week)
Type of study:
Form of teaching:
Mode of completion and credits:
Exam (5 credits)
Course objective:
The objective of the course is to provide an orientation in the world of financial markets. Students get acquainted with the financial markets classification, methods of financial tools valuation, and business practices in the stock, bond, currency, repo and derivatives markets. During the course the risk management will be provided.
Course methods: -- item not defined --
Course content:
1.Definitions, creation and extinction of money (allowance 1/0)
financial statements of banks (loans, deposits, repo transactions, derivatives and other financial instruments), where, when and how does the money create and become extinct, liquidity and reserve requirements, example of banking system without central bank, example of banking system with central bank, profit and loss relations between commercial banks, enterprises, government, households and central bank, structure of statements of financial position and profit and loss accounts of commercial banks

Role of central bank and payment systems (allowance 1/0)
a.origin of central banks, structure of statement of financial position and profit and loss account of central bank, two schemes of statement of financial position of central banks, examples of statements of financial position (Fed, European central bank, Bank of Japan, Bank of England, Czech National Bank), administration of international reserves and foreign exchange interventions, seigniorage, reasons of central bank losses, role of reserve requirements, payment instruments, gross and net payment systems, classification of payment systems, payment system in domestic currency, foreign currency payment system, payment system in USA, Eurozone, Japan, Great Britain and in the Czech Republic

Monetary policy (allowance 1/0)
essentials of monetary policy, monetary policy instruments (open market operations, standing facilities), operating target, intermediary target (monetary aggregate targeting, monetarists, use of monetary aggregates, exchange rate targeting), ultimate target (price stability, definition f inflation, nominal and real interest rates, deflation), inflation targeting (history, explicit inflation target, transparency of monetary policy, role of inflation forecasts)

4.Monetary policy transmission mechanism (allowance 1/0)
a.channels of monetary policy, impact of inflation expectations, persistence of prices and wages, monetary policy lags, monetary policy, GDP and unemployment, independence of monetary policy (independence, arguments in favour and against independence, examples), rules of monetary policy (autopilot, Friedman's and Taylor's rule, NAIRU), monetary policy of Fed, European central bank, Bank of Japan, Bank of England and Czech National Bank

Foreign exchange policy (allowance 1/0)
exchange rate (definition, fundamental and technical analysis), interbank and client's foreign exchange market (trading on foreign exchange market, global foreign exchange market), equilibrium exchange rate determination models (purchasing power parity model, balance of payment model and internal and external equilibrium model, money stock model, asset market model), exchange rate regimes (gold standard, fixed exchange rate, pure, independent and managed float, currency board), foreign exchange interventions (essentials, reasons, effectiveness, examples), balance of payments, gold (gold trading, gold and central banks), Tobin tax, dolarization and eurization, exchange rate policy of central banks, monetary crises

6.Financial system structure (allowance 1/0)
a.balance sheet method, balance sheets of sectors, financial system architecture, financial market categories, financial risks, driving forces of financial market development, financial market efficiency, securities, margin trade, repo market, short sale, financial market regulation and supervision, consumer protection, single licence, deposit insurance, financial conglomerates, international financial supervision

Debt market I (allowance 1/0)
a.debt relations, interest, day count convention, credit risk, interbank deposit market, yield curve, bootstrapping, forward interest rates, fair value of debt instrument, amortised cost of debt instrument, yield to maturity, annuity, interest rate risk, modified and Macaulay duration, convexity, basis point value, interest rate positions, duration of assets and liabilities, credit, loan, deposit, history of bonds, bond classification according to issuer quality, bond classification according to cash flows, bond classification according to the relation to issuer assets, bond classification according to the relation to foreign countries, covenants, bonds trading, bonds according to Czech law, government bonds (USA, EU and Japan)

Debt market II (allowance 1/0)
bill of exchange and cheque, structured instrument, leasing, factoring and forfaiting, default of borrower, debts of households, mortgages, US mortgage market, European mortgage market, Czech mortgage market, building savings institutions loans, consumer loans, distraint of debtor, discharge from debts, loan registry, debts of companies, debts of public institutions, public debt, public debt management, derivatives in public debt management, foreign currency public debt, debt of USA, debt of EU countries, debt of the Czech Republic, public-private-partnership, debt instruments taxation, interest paid as tax expense

Equity market I (allowance 1/0)
history and classification of shares, creation of share capital, increase of share capital (underwriting of new shares, from equity), decrease of share capital, warrants, share splitting, company in the Czech Republic, share valuation, share price behaviour, price of control, fundamental analysis, technical analysis, psychological analysis, share trading (OTC and exchange market), equity indices (USA, EU, Japan and Czech Republic), global depository receipts

10.Equity market II (allowance 1/0)
Management remuneration, incentive equity options, privatization in the Czech republic, equity analysts, equity bubbles, role of central banks in equity bubbles, accounting scandals in 2001 and 2002, mergers and acquisitions, equity instruments taxation, bankruptcy, close-out netting, impact of equity market on economy, share investments, portfolio theory (average return of portfolio, portfolio variance, efficient frontier, optimum portfolio, single index model, CAPM model)

11.Savings and investment (allowance 1/0)
financial position of households, financial advisors, building savings, collective investment funds, investment funds in the Czech Republic in 1990s, pay-as-you go and funded pension systems, pension funds, life insurance, real estates, insider trading, frauds on financial market, financial market and taxes

Derivative market and securitization (allowance 1/0)
definition of derivative, classification and categories of derivatives (forwards, futures, swaps, options, interest rate derivatives, currency derivatives, equity derivatives, commodity derivatives, credit derivatives), motives and development of securitization, traditional securitization, tranching, products of securitization, asset-backed securities (collaterized loan obligations, collaterized debt obligations, collaterized bond obligations, synthetic CDO, collaterized mortgage obligations, asset-backed commercial papers), securitization mechanism, required characteristics of securitized assets, originator risks, clean-up call, credit enhancement, early amortization, special purpose vehicles (SPV, SPE), synthetic securitization (basic and leveraged), examples of securitization in Europe and in the Czech Republic, impact on economy

Learning outcomes and competences:
After completing the course, student:
Will explain the impact of financial markets on macroeconomic variables (GDP, inflation and employment)
Will express the nature of financial instruments
Will give examples of the balance sheet view on financial instruments
Will interpret the financial literature and financial press to the broad public
Will recognize the function of financial institutions

Teaching methods and workload (hours of workload):
Type of teaching method
Daily attendance
Direct teaching
     Attendance of lectures
36 h
     Course reading and ongoing preparation
32 h
     Ongoing evaluation
12 h
     Composing of presentation
12 h
     Preparation for final oral exam
48 h
140 h
Assessment methods:
Requirement type
Daily attendance
Active lecture/seminar/workshop/tutorial participation12 %
6 %
Final oral exam82 %
Total100 %
Course completion:
Activity on lectures 0 - 12 points
Prezentation 0 - 6 points
Final oral exam 0 - 82 points
Support for combined/distance forms of study:
-- item not defined --
Reading list:
Language of instruction: Czech
JÍLEK, J. Finance v globální ekonomice I: Peníze a platební styk. Praha, Czech Republic: Grada Publishing a.s., 2013. 664 p. ISBN 978-80-247-3893-2.
JÍLEK, J. Finance v globální ekonomice II: Měnová a kurzová politika. Prague, Czech republic: Grada Publishing a.s., 2013. 560 p. ISBN 978-80-247-4516-9.

Language of instruction: Czech
JÍLEK, J. Finanční trhy a investování. 1st ed. Praha: Grada Publishing, 2009. ISBN 978-80-247-1653-4.
JÍLEK, J. Akciové trhy a investování. 1st ed. Praha: GRADA, 2009. ISBN 978-80-247-2963-3.
JÍLEK, J. Hlavní účetní systémy. IFRS a US GAAP. 1st ed. Praha, ČR: GRADA publishing, 2018. 200 p. ISBN 978-80-247-2774-5.

Study plans:
Field of study N-EM-FRP Corporate Finance Management in the Global Environment, full-time form, initial period WS 2017/2018, place of teaching Mladá Boleslav
Field of study N-EM-FRP Corporate Finance Management in the Global Environment, full-time form, initial period SS 2017/2018, place of teaching Mladá Boleslav
Run in the period of:
Course tutor:
prof. Ing. Josef Jílek, CSc. (examiner, instructor, lecturer, supervisor)
Teaching language: Czech
Mladá Boleslav

Last modification made by Mgr. Luděk Švejdar on 05/02/2019.

Type of output: