Theory of Finance
- The basic objective of this foundation course in finance is to summarize the fundamental theoretical aspects of finance relevant to the future study of finance and application within the scope of your master’s degree.
- To know: Patterns of functioning and development trends of the national and global financial system: fiscal, budgetary system, public finance, financial market; Main results of the latest research in the field of finance theory; Differences between the major segments of the financial markets; Efficient market hypothesis; Types of financial intermediaries and their functions; Principles that determine the efficiency of financial operations.
- To be able to: Identify key issues of information efficiency of financial markets; Highlight the features of the functioning of financial markets in economies in transition are not clearly fixed the rights of private property; Understand the essence of the changes taking place in the financial markets; Assess the factors affecting the stability of emerging economies; Evaluate the causes of financial crises in developing countries.
- To acquire skills in: Possession of the procedure and methodology of scientific research in the professional field; Skills of independent research work; Analysis of the specific situation on the financial markets, budgetary, fiscal system, public finance.
- Topic 1. Introduction and history of the financial schoolPeriods of financial science. The essence of classical and neoclassical theory of finance; The role of individual scientists in the development of financial science; The neoclassical theory of finance; Features of development of financial science in Russia; Russian scientists contribution to the development of financial science.
- Topic 2. The financial system, financial markets, the modern theory of financeThe functions of the financial markets. Structure and classification of financial markets (according to the type of financial instruments, according to the method of placement of financial instruments by maturity instruments, according to the method of organization of transactions). The international financial market, eurobonds, euro. International securities market. Financial intermediaries. The role of financial intermediation to ensure the effectiveness of economic development. Types of financial intermediaries. Regulation of the financial system.
- Topic 3. Models in Financial TheoryModels concerning the effect of time on the value of capital (money and financial assets) in a world of certainty. Models concerning the effect of risk on the value of capital (money and financial assets) in a world of uncertainty. Interest and Dividends — The Basic Model. Capital Budgeting.
- Topic 4. The time and the risk value of capital.Separating Investment Decisions and Present Values From Other Considerations. Market Depth and Transaction Costs. An Introduction to The Tax Code. Working With Taxes. Inflation. Multiple Effects. Statistical Tools in Financial Theory. Random Processes — Stochastic Dominance on the Payoff-Probability Plane. Random Processes — Stochastic Dominance on the Mean Yield – Risk Plane. Investment Decisions in a Random Market.
- Topic 5. The theory of public financeBasic concepts of the theory of public finance. Rationale for government intervention in the economy. Functions of the State . Functions of the public finances. The centralized and decentralized funds of funds. The state budget. The budgetary system.
- Topic 6. Public expenditure and the process of budgeting. Budget executionThe structure of public finance and fiscal system of the Russian Federation. Budget classification. Classification of income. The classification of expenditure budgets. Classification of government operations. State and municipal budgets. The nature and function of the budget. Public budget function. Necessary budget properties. E budget. Budgeting. The concept and principles of public expenditure. Forms of government spending. The main functional expenditure federal budget.
- Topic 7. Management of public finances: systems, processes and institutions, financial reportingPublic financial management systems. Processes of public financial management. Institutions of state financial management. Financial Reporting Standards. Key performance indicators of financial management.
- Topic 8. Incomes of the state budget. Budget Balance: Problems of Deficit and DebtContent and basic classification of public revenues, their composition and structure. The essence of taxes and principles of taxation. The function and role of taxes in social reproduction. tax items. Classification of taxes and the characteristics of the main types. The economic essence of public revenues. State and local income: composition and methods of mobilization. Taxes - the main form of public revenues. Direct and indirect taxes. Basics of tax planning. State fiscal monopoly. Customs revenues. Methods for determination of customs revenue. Revenues from the management and sale of state property.
- Topic 9. Audit and guarantees, fraud and corruptionTypes of fraud at the level of public finance. Methods of detection, suppression. Stakeholder models. Impact on the effectiveness of budget execution. Internal control and its role in preventing fraudulent schemes. Forensic.
- Topic 10. Fundamentals of Corporate FinanceThe basic concept of management decisions, methodical provision of financial management. Structure and cost of capital. The concept of payment for items the company's capital. The concept of the company's working capital. Internal and external sources of funding. Analysis and evaluation of the financial condition of the company. Models achievable economic growth.
- Topic 11. International Finance and Monetary PolicyThe foreign exchange market. Exchange rates in the long and short term. Currency fluctuations. Purchasing power parity. The international financial system. The role of the international financial market in monetary policy. The regulation of the exchange rate as a goal and a method of monetary policy.
- Interim assessment (2 module)0.5 * Final Examination + 0.25 * Homework + 0.1 * In-class activities + 0.15 * Written assignment
- Copeland, T. E., Weston, J. F., & Shastri, K. (2014). Financial Theory and Corporate Policy: Pearson New International Edition (Vol. 4th ed). Harlow, Essex: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1418250
- Bek-Thomsen, J., Christiansen, C. O., Jacobsen, S. G., & Thorup, M. (2017). History of Economic Rationalities : Economic Reasoning As Knowledge and Practice Authority. Cham, Switzerland: Springer. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1489353