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Regular version of the site

Theory of Finance

2021/2022
Academic Year
ENG
Instruction in English
8
ECTS credits
Course type:
Compulsory course
When:
1 year, 1-3 module

Instructors

Course Syllabus

Abstract

Essentially the course is an introduction to the theory and practice theory of modern financial economics and financial management, with a focus on capital markets and investments, and quantitative finance. It will introduce you to, or help you revise, the basic fundamentals – the most important concepts and analytical tools used in financial decision making, the important role of financial markets in finance, the basic principles of valuation, investing capital in investment opportunities to create value, the meaning and management of risk, and how organizations should raise and invest capital. The course consists of lectures (28 hours) and seminars (28 hours). The seminars involve student presentations (individually or in small groups) of contemporary research on financial system, Theory of Change in finance, corporate and public finance, financial management published in leading economics and finance journals. For each topic, a list of suggested articles is provided by the instructor.
Learning Objectives

Learning Objectives

  • 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.
Expected Learning Outcomes

Expected Learning Outcomes

  • 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.
  • 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 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.
Course Contents

Course Contents

  • Topic 1. Introduction and history of the financial school
  • Topic 2. The financial system, financial markets, the modern theory of finance
  • Topic 3. Financial assets: bond (theory and yields), shares (equity valuation).
  • Topic 4. Market efficiency
  • Topic 5. Mean-Variance theory. Expected utility approach.
  • Topic 6. Alternative measures to mean-variance
  • Topic 7. Introduction to financial crisis theory. Financial risk management
  • Topic 8. Advanced Topics in finance.
  • Topic 9. Theory for Financial Decisions
  • Topic 10. The interest rate theory
  • Topic 11. Bond Prices and Yields
Assessment Elements

Assessment Elements

  • non-blocking Homework
  • non-blocking In-class activities
  • non-blocking Written assignment
  • non-blocking Final Examination
    The midterm test will take a form of 2 hours (80 min) test of 40 open-ended questions in the LMS environment. The student is exempt from the exam if he has completed all the projects of the course.
Interim Assessment

Interim Assessment

  • 2021/2022 1st module
  • 2021/2022 2nd module
  • 2021/2022 3rd module
    0.3 * Final Examination + 0.35 * Homework + 0.35 * Written assignment
Bibliography

Bibliography

Recommended Core Bibliography

  • 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

Recommended Additional Bibliography

  • 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