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ECTS Course Overview



Trends and Innovations in Financial Markets

* Exchange students do not have to consider this information when selecting suitable courses for an exchange stay.

Course Unit Code154-0566/02
Number of ECTS Credits Allocated4 ECTS credits
Type of Course Unit *Choice-compulsory
Level of Course Unit *Second Cycle
Year of Study *
Semester when the Course Unit is deliveredSummer Semester
Mode of DeliveryFace-to-face
Language of InstructionEnglish
Prerequisites and Co-Requisites Course succeeds to compulsory courses of previous semester
Name of Lecturer(s)Personal IDName
NOV33Ing. Martina Novotná, Ph.D.
Summary
The aim of the course is to provide an overview of current trends in financial markets. The main focus is on asset securitization and the creation of securitized products, the role of credit rating agencies in capital markets and the essence of alternative investment.
Learning Outcomes of the Course Unit
The course is focused on selected topics of financial markets with the emphasis on current trends, innovative financial instruments and alternative investments. The course covers main aspects of asset securitization which provides an important source of financing for a variety business. In this course, students will be provided with an overview of securitized products and alternative investments, recognize the main risks and understand the impact of regulatory changes on the market.

At the end of the course, students will be able to:

- Evaluate the importance and types of financial innovations,
- understand the concept and process of asset securitization,
- characterise the main types of securitised products,
- discuss the role of rating agencies in the financial markets,
- distinguish between the principal classes of alternative investments,
- access the importance of adding an alternative investment to a portfolio,
- characterise current trends in the financial markets.

The prior knowledge of basic concepts and tools of financial markets is essential in this course.
Course Contents
1. Financial innovations - the principle of financial engineering, new financial products
2. Principles of asset securitization - basic concept of securitization, basic terminology
3. Securitization process - process of creation of securitized products, types of underlying assets
4. Market participants in securitized products - originator, servicer, SPE, investors, brokers, state agencies
5. Residential mortgages - the characteristics of mortgage loans, mortgage market, standards of state agencies, types of mortgage loans according to credit quality
6. Securitization of residential mortgage loans (MBS) - prime and subprime mortgages, agency MBS, pass-through securitized products, prepayment risk
7. Tranching, collateralized mortgage obligations (CMO) - cash flow tranching and redistribution, CMO structure
8. Asset-Backed Securitized Products (ABS) - underlying assets of ABS products, credit risk, payment waterfall
9. Importance of securitization and current trends - causes of financial crisis, current trends in securitization
10. The role of rating agencies in capital markets - the essence and process of rating evaluation, characteristics of rating agencies
11. Regulation and current trends in rating industry - current trends in the regulation of rating agencies and the development of the rating market
12. Fundamentals of alternative investment - the definition of alternative investments and the importance of alternative investment
13. Characteristics and types of alternative investments - real assets, hedge funds, private equity
14. Investing in real assets - benefits, risk and ways of investing in natural resources, commodities, real estate and land
Recommended or Required Reading
Required Reading:
CHAMBERS, Donald R., Hossein KAZEMI and Keith H. BLACK. Alternative Investments: An Allocator's Approach. Hoboken: Wiley, 2021. ISBN 9781119651697.
MADURA, Jeff. Financial Markets and Institutions. Boston: Cengage, 2021. ISBN 978-0-357-13079-7.
TURI, Abeba N. Financial Technologies and DeFi. A Revisit to the Digital Finance Revolution. Cham: 2023. ISBN ISBN978-3-031-17997-6.
CHAMBERS, Donald R., Hossein KAZEMI and Keith H. BLACK. Alternative Investments: An Allocator's Approach. Hoboken: Wiley, 2021. ISBN 9781119651697.
MADURA, Jeff. Financial Markets and Institutions. Boston: Cengage, 2021. ISBN 978-0-357-13079-7.
TURI, Abeba N. Financial Technologies and DeFi. A Revisit to the Digital Finance Revolution. Cham: 2023. ISBN ISBN978-3-031-17997-6.
Recommended Reading:
BODIE, Zvi, Alex KANE and Alan J. MARCUS. Investments. New York: McGraw-Hill Education, 2021. ISBN 978-1-260-57115-8.
JONES, Colin A. and TREVILLION, Edward. Real Estate Investment. Theory and Practice. Cham: Palgrave, 2022. ISBN978-3-031-00967-9.
SHRIER, DAvid L. and Alex PENTLAND. Global Fintech. Financial Innovation in the Connected World. Cambridge: MIT Press, 2022. ISBN 9780262543668.
BODIE, Zvi, Alex KANE and Alan J. MARCUS. Investments. New York: McGraw-Hill Education, 2021. ISBN 978-1-260-57115-8.
JONES, Colin A. and TREVILLION, Edward. Real Estate Investment. Theory and Practice. Cham: Palgrave, 2022. ISBN978-3-031-00967-9.
SHRIER, DAvid L. and Alex PENTLAND. Global Fintech. Financial Innovation in the Connected World. Cambridge: MIT Press, 2022. ISBN 9780262543668.
Planned learning activities and teaching methods
Lectures
Assesment methods and criteria
Tasks are not Defined