Financial Economics - JEB120
Title: Financial Economics
Guaranteed by: Institute of Economic Studies (23-IES)
Faculty: Faculty of Social Sciences
Actual: from 2021
Semester: winter
E-Credits: 6
Examination process: winter s.:
Hours per week, examination: winter s.:2/2, Ex [HT]
Capacity: 92 / 92 (97)
Min. number of students: unlimited
4EU+: no
Virtual mobility / capacity: no
State of the course: taught
Language: English
Teaching methods: full-time
Teaching methods: full-time
Note: course can be enrolled in outside the study plan
enabled for web enrollment
priority enrollment if the course is part of the study plan
Guarantor: PhDr. František Čech, Ph.D.
Teacher(s): PhDr. František Čech, Ph.D.
Ing. Weizhi Sun
Class: Courses for incoming students
Examination dates   WS schedule   Noticeboard   
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download handbook JEB120 - Financial Economics - WS 2023-2024.pdf PhDr. František Čech, Ph.D.
Annotation -
Last update: PhDr. František Čech, Ph.D. (03.10.2018)
The course will cover the foundations of financial markets, money markets, and banks and their role in the economy and country financial stability, lessons from and responses to the current financial crisis.
Literature -
Last update: PhDr. František Čech, Ph.D. (10.10.2018)

Textbooks:

  • Bodie, Kane, Marcus: Investments. Tenth global edition, 2014
  • Brealey, Myers and Allen: Principles of corporate finance. 10th edition, 2011
  • Hubbard and O'Brien, Money, Banking, and the Financial System, International Edition, 2011
  • Hull: Options, futures, and other derivatives. 6th edition, 2006
  • Milne: The Fall of the House of Credit, 2009
  • Mishkin: The economics of money, banking, and financial markets. Eleventh edition, global edition, 2016
  • Mishkin,Eakins: Financial markets and institutions, 7th ed., Global ed, 2012
Requirements to the exam -
Last update: PhDr. František Čech, Ph.D. (25.09.2023)

Course requirements

Homework assignment (15 pts)

Midterm examination (30 pts)

Final examination (50 pts)

Active class participation (5 pts)

To pass, students need to have at least 50.5 pts and at least 25 pts from the final exam

Grading scale:

90.5 - 100 pts – final grade A

80.5 -  90 pts – final grade B

70.5 -  80 pts – final grade C

60.5 -  70 pts – final grade D

50.5 -  60 pts – final grade E

    0 -   50 pts – fail

Syllabus -
Last update: PhDr. František Čech, Ph.D. (03.10.2018)

 

Money and Monetary Institutions  

  • the evolution of money and its functions, money aggregates, the role of money in the short versus long run, time value of money

Financial Markets, Financial Institutions, Banks and Banking 

  • comparison of real and financial assets, agents and clients of financial markets, the evolution of financial markets, market structure, ongoing trends (globalization, securitization, financial engineering, regulation, and liberalization)           
  • the role and evolution of banks, regulation of banks, the role and function of central banks, adverse selection and moral hazard in a lender-borrower relationship            

Financial Engineering and Financial instruments

  • introduction of money markets, bond markets, equity securities, stock and bond market indexes, derivative markets, exchange-traded markets, over-the-counter markets, forward and future contracts, options, and arbitrage
  • Fixed Income Securities 
    • bond characteristics, bond pricing, bond yields, yield curve, yield curve and future interest rates, interest rate structure
  • Options and Futures    
    • value of options, option strategies, option valuation, future contracts, trading mechanisms in futures contracts, future market strategies

Security analysis              

  • macroeconomic and industry analysis, intrinsic value versus market price, financial statement analysis

Portfolio Choice and Portfolio Management            

  • interest rates, risk and risk premium, real versus nominal risk, risk and risk aversion, systematic versus intrinsic risk, portfolio risk, optimal portfolio, portfolio diversification, mean-variance analysis, capital asset pricing models(CAPM), portfolio performance valuation, international diversification, the process of portfolio management

Efficient Markets vs Behavioral Finance

  • efficient market hypotheses, empirical challenges to efficient market hypotheses, the role of psychology in behavioral finance

Bank Crisis and International Financial System  

  • causes of the current global banking crisis, shadow banks and the financial crisis of 2007-2008, the role of government in sustainable banking, foreign exchange markets and exchange rate regimes, international money and capital markets, growing interdependence of financial markets, sources of financial risks