Financial Markets and Institutions
- Course is aimed at study of the fundamentals of financial markets and financial instruments, the features of the formation of modern financial markets, on the practical application of financial instruments, the types of financial institutions and their roles and functions in the financial markets.
- Students should know: • the structure and objectives of the financial market; • the structure of financial market and the contents of financial assets; • basic concepts, functions and tools of the financial market: securities, currency, loans, precious metals and precious stones; • understand the challenges of uncertain environment of financial markets, assess them and take appropriate financial and investment decisions.
- Students should be able to: • properly evaluate investment risks; • build relationships with various financial institutions and intermediaries; • evaluate the investment as a financial asset and use the various tools of the financial market; • use strong financial-analytical skills and apply them to solve investment problems; • plan and perform an independent research project in the area of financial markets and istruments.
- Students should acquire skills in: • basics of legal support in the functioning of the financial market; • methods of control over the financial situation of the issuer; • skills for using the various tools in the financial market. • capability of an innovative, open and ethical mindset • capability to evaluate risks of financial decision.
- Introduction to the financial market and institutionOverview of Financial Markets. Overview of Financial Institutions. Globalization of Financial Markets and Institutions.
- The interest rate and the mechanism for its determinationLoanable Funds Theory. Movement of Interest Rates Over Time. Determinants of Interest Rates for Individual Securities.
- Money MarketsMoney Markets Instruments. Yields on Money Market Securities. Money Market Participants. International Aspects of Money Markets.
- Bond and mortgage marketsBond Market Securities. Bond Market Participants. International Aspects of Bond Markets. Mortgages and Mortgage-Backed Securities. Primary Mortgage Market. Secondary Mortgage Markets. Participants in the Mortgage Markets. International Trends in Securitization.
- Stock MarketsStock Market Securities. Primary and Secondary Stock Markets. Stock Market Participants. International Aspects of Stock Markets.
- Foreign exchange marketsForeign Exchange Markets and Risk. Foreign Exchange Rates and Transactions. The conversion arbitrage. Spot and forward transactions of foreign exchange. The interest arbitration.
- Derivative securities marketsForwards and Futures. Options. Regulation of Futures and Options Markets. Swaps. Caps, Floors, and Collars. International Aspects of Derivative Securities Markets.
- Financial players: commercial banks, savings institutions, credit unions and finance companiesCommercial Banks as a Sector of the Financial Institutions. Industry. Industry Performance. Savings Institutions. Credit Unions. Finance Companies.
- Financial players: insurance companies, securities firms, investment banks, mutual funds, hedge funds, pension fundsLife Insurance Companies. Property–Casualty Insurance Companies. Securities Firm and Investment Bank. Mutual Funds and Hedge Funds. Pension Funds.
- Financial institutions and risksCredit Risk. Liquidity Risk. Interest Rate Risk. Market Risk. Off-Balance-Sheet Risk. Foreign Exchange Risk . Country or Sovereign Risk . Technology and Operational Risk. Insolvency Risk. Other Risks and Interaction Among Risks.
- Interim assessment (2 module)0.4 * Final examination + 0.27 * Homework projects + 0.06 * In-class activity + 0.27 * Written assignment
- Alexander, G. J., Sharpe, W. F., & Bailey, J. V. (2012). Fundamentals of investments. Slovenia, Europe: Prentice Hall. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.C1BEBDC4
- Fabozzi, F. J., Modigliani, F., & Ferri, M. G. (2012). Foundations of financial markets and institutions. Slovenia, Europe: Prentice Hall. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.91C13170
- Mishkin, F. S., Matthews, K., & Giuliodori, M. (2013). The Economics of Money, Banking and Financial Markets (Vol. European ed). Harlow, England: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1417913