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Fundamentals of Financial Markets

Type of study Bachelor
Language of instruction English
Code 154-0560/01
Abbreviation FFM
Course title Fundamentals of Financial Markets
Credits 3
Coordinating department Department of Finance
Course coordinator Ing. Kateřina Kořená, Ph.D.

Subject syllabus

1. Structure and functioning of financial markets, classification of markets, types of financial intermediaries.
2. Money markets, capital markets, primary markets, secondary markets - characteristics, relationships.
3. Equity securities - stocks, classification of stocks, stockholder´s rights. Stocks and bonds - main differences.
4. Debt securities - bonds, role of bonds, classification of bonds. Importance of rating.
5. Financial investment, importance of investment process, phases of investment process, main goals of investing. Portfolio diversification.
6. Collective investment. Main subjects of collective investment. Classification of funds. Advantages and disadvantages of collective investment.
7. Capital markets participants. Role of stock exchanges. Prague Stock Exchange, RM-System, Central Securities Depository Prague.
8. Czech capital market - contemporary situation.
9. New trends in financial markets, contemporary situation in financial markets, lessons from financial crises.
10. Characteristics of banking system, commercial banks and their role in the banking system and in the economy.
11. Central banks. The role and basic functions of central banks - two stage banking system. Central banks and monetary policy. Independence of central banks.
12. Bank liabilities of commercial banks – characteristics of deposit services (types of demand and savings deposits) and non-deposit liabilities. Classification of client banking accounts, their advantages and disadvantages.
13. Credit services of commercial banks - characteristics of credit products. Lending policy and procedures.
14. Off-balance sheet services of commercial banks - characteristics of non-deposit and non-loan products. The purpose of implementation of these services.
15. Payment systems - the role of payment systems in the economy, their characteristics and classification. Payment systems providers.
16. Cashless payment instruments – direct and electronic banking. Main reasons for electronic banking operations. Communication systems.
17. Insurance industry and policy - insurance activities, insurance companies. Regulation of insurance industry, forms of regulation. Insurance and law.
18. Life insurance - characteristics, basic concept, premium, life insurance contracts. Additional insurance.
19. Non-life insurance I. - characteristics, types of nonlife insurance. Insurance of persons, liability insurance.
20. Non-life insurance II. – property insurance, property insurance for physical persons, business risk insurance and industrial insurance, agricultural risk insurance.
21. Pension system in the Czech Republic - 3rd pension pillar - participation funds, transformed funds.

Literature

CASU, Barbara, Claudia GIRARDONE and Philip MOLYNEUX. Introduction to banking. 3rd ed. Harlow: Financial Times Prentice Hall, 2021. E-book. ISBN 978-1292240350 .
CECCHETTI Stephen G. a Kermit L. SCHOENHOLTZ. Money, Banking, and Financial Markets. 6th ed. New York. MacGraw-Hill, 2020.736 p. ISBN 978-1260226782.
THOYTS, Rob. Insurance theory and practice. London: Routledge, 2010. 344 p. ISBN 978-0-415-55904-1.

Advised literature

APOSTOLIK, Richard, Christopher DONOHUE and Peter WENT. Foundations of banking risk: an overview of banking, banking risks, and risk-based banking regulation. Jersey City: GARP; Hoboken, c2009. 239 p. ISBN 978-0-470-44219-7.
FABOZZI, Frank J. and Franco MODIGLIANI. Capital Markets. Institutions and Instruments. 5th ed. Cambridge: MIT Press. 2015. 1080 p. ISBN 978-0262029483 .
MISHKIN, Frederic S. a Stanley G. EAKINS. Financial Markets and Institutions. 8th ed. Boston: Pearson Prentice Hall, 2014. 704 p. ISBN 978-0133423624 .