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ECTS Course Overview



International Monetary Relations

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

Course Unit Code114-0511/02
Number of ECTS Credits Allocated5 ECTS credits
Type of Course Unit *Choice-compulsory
Level of Course Unit *First Cycle, 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
HLA31Ing. Karel Hlaváček, Ph.D.
MEL044doc. Ing. Aleš Melecký, Ph.D.
Summary
The central themes of the course are selected topics from the international
monetary theory as well as from the international financial markets theory. The
course is focused on selected topics of theory and practice of
international financial markets. The problem areas are: foreign exchange
markets, foreign exchange risk and managing of risk through the us of financial
derivates, exchange rate modelling and forecasting and balance of payments´
analysis
Learning Outcomes of the Course Unit
- To outline fundamentals of international currency markets and explain essential concepts in this area.
- To describe relations between exchange rates and interest rates and to clarify their impacts upon spot and forward rates.
- To identify major determinants of exchange rates development.
- To explain differences among exchange rates regimes in common use and central bank's policy that is implied with their usage.
- To define exchange rate risk and its management using currency derivatives.
- To analyse structure of balance of payments using an example of the Czech republic.
Course Contents
1. Introduction to foreign exchange markets.
- Exchange rates and quotation.
- Function and structure of forex markets.
- Interbank forex market.

2. Arbitrage and spot transactions.
- Arbitrage and speculation.
- Types of transactions on forex markets.
- Spot transactions.

3. Forward transactions and hedging currency risk.
- Covered interest rate arbitrage.
- Quotation of forward transactions.
- Hedging in forward contracts.

4. Exchange rates.
- Types of exchange rates.
- Simple model of exchange rate determination.
- Equilibrium and stability in a forex market.

5. Currency futures.
- Characteristics of futures contracts.
- Factors influencing futures‘ markets.
- Hedging with futures.

6. Currency options.
- Characteristics of currency options.
- Value of an option.
- Hedging with currency options.

7. Currency swaps.
- Characteristics of currency swaps.
- Quotation of currency swaps.
- Types and process of currency swaps.

8. Exchange rate determination in short range - asset market model.
- Demand for a foreign asset.
- Difference between interest rates.
- Fisher‘s effect.
- Uncovered and covered interest rate parity.


9. Exchange rate determination in long range.
- Theory of purchasing power parity.
- Parity conditions‘ model.

10. Exchange rates management.
- Exchange rate regimes.
- Theoretical approaches to exchange rates managing.
- Currency interventions and their effectiveness.

11. Exchange rate policy in transition economies.
- Approaches in an exchange rate management.
- Tools of exchange rate policy.
- Exchange rate policy in Czech republic.

12. Currency crises.
- Reasons of currency crises.
- Forecasting models.
- Approaches to currency crises‘ solutions.

13. Balance of payments.
- Balance of payments‘ categories.
- Balance of payments in theoretical models.
- Adjusting of balance of payments.
Recommended or Required Reading
Required Reading:
MOFFETT, Michael H., Arthur I. STONEHILL a David K. EITEMAN. Fundamentals of multinational finance. Ed. 4th. Upper Saddle River: Pearson, c2012. ISBN 978-0-13-282991-5.
MADURA, Jeff. International financial management. London: Cengage Learning, 2017. ISBN 978-1473725508.
MISHKIN, Frederick, S., The Economics of Money, Banking and Financial Markets. London: Pearson 2015. ISBN 978-0133836790.
MANDEL, Martin a Jaroslava DURČÁKOVÁ. Mezinárodní finance a devizový trh. Praha: Management Press, 2016. ISBN 978-80-7261-287-1.
POLOUČEK, Stanislav et al. Peníze, banky, finanční trhy. Praha: C.H.Beck, 2009. ISBN 978-80-7400-152-9.
MOFFETT, Michael H., Arthur I. STONEHILL a David K. EITEMAN. Fundamentals of multinational finance. Ed. 4th. Upper Saddle River: Pearson, c2012. ISBN 978-0-13-282991-5.
MADURA, Jeff. International financial management. London: Cengage Learning, 2017. ISBN 978-1473725508.
MISHKIN, Frederick, S., The Economics of Money, Banking and Financial Markets. London: Pearson 2015. ISBN 978-0133836790.
Recommended Reading:
SHAPIRO, Alan C. Multinational Financial Management. 10th ed., Wiley, 2013. ISBN 978-1118572382.
EITEMAN, David K., Arthur I. STONEHILL a Michael H. MOFFETT. Multinational Business Finance. 14th ed., Harlow: Pearson Education Limited, 2016. ISBN 978-0133879872.
BYFORD, M., and MANKIW, G. Principles of Macroeconomics: Australian Edition. 6th edition, South Melbourne: Cengage Learning Australia, 2014. 536pp., ISBN 9780170248518

JUREČKA, Václav. Makroekonomie. 3., aktualizované a rozšířené vydání. Praha: Grada Publishing, 2017. ISBN 978-80-271-0251-8.
SHAPIRO, Alan C. Multinational Financial Management. 10th ed., Wiley, 2013. ISBN 978-1118572382.
EITEMAN, David K., Arthur I. STONEHILL a Michael H. MOFFETT. Multinational Business Finance. 14th ed., Harlow: Pearson Education Limited, 2016. ISBN 978-0133879872.
BYFORD, M., and MANKIW, G. Principles of Macroeconomics: Australian Edition. 6th edition, South Melbourne: Cengage Learning Australia, 2014. 536pp., ISBN 9780170248518

Planned learning activities and teaching methods
Lectures, Individual consultations
Assesment methods and criteria
Tasks are not Defined