Finance I

obowiązkowe

(tylko po angielsku) Basic knowledge about Macroeconomics, Microeconomics, Algebra, knowledge obligatory for 2nd year students.

The first part of the lecture, financial market analysis, deals with the composition of financial markets and the analysis and valuation of traded securities. Use of securities both in constructing and managing portfolios and in contributing to portfolio performance will be described. In the second part of the lecture concepts, techniques and practical applications about managerial finance will be presented. In the last part we will concentrate on failures of financial markets with special interest of currency and banking crises as well as some positive and negative aspects of internationalization. There are no restrictions nor prerequisites, the lecture is fully autonomous. Successful students can receive a LETTER OF RECOMMENDATION for 2nd grade studies conducted in English in WNE UW.

1. Introduction. What is money? Functions of money. Motives for holding cash/near cash balances. What is the price of money? Financial market and it's participants.

2. Money market. Marketable securities. Treasury Bills. Commercial papers. NBP bills. Other bills. Yield curve.

3. Depository lending market. Real/effective interest on borrowing. Simple interest. Compounded interest: annual compounding, more frequent compounding, continuous compounding. Irregular payments. Future values. Regular payments: annual payments with annual compounding, annual payments with more frequent compounding, more frequent payments with more frequent compounding. Present values: single payments, annual discounting, more frequent discounting, continuous discounting. Mortgage loans. Problems with interest rate volatility. Polish (EU) regulations on consumer loans.

4. Bonds market. Structure of Polish debt. Valuation of a bond. Duration, convexity, dispersion.

5. Capital market. Structure of the market. Stock markets worldwide. Primary market. Stock exchange. Asssets traded. Risk on capital market. Investing on the stock market. Framework of fundamental analysis. Common Ratios and what they mean. Technical Analysis. Trendlines. Price patterns. Dow and Elliott wave theory. Futures and short selling.

6. Futures market and option market. Daily marking to market. Short term interest rate futures. Long-term interest rate futures. Currency futures. Stock index futures. Options. Reasons to use options. Financial leverage.

7. Foreign exchange market. Functions of currency market. Transactions in the interbank market Spot and forward markets. Foreign exchange rates and quotations. General view of the market

8. Swaps market. Interest rate swaps. Currency swaps. Basis swaps.

9. Investing internationally - Country risk evaluation

10. Capital account liberalization and financial integration. Currency, banking, debt and systemic crises.

11. Currency crises and stabilization in open economies. Capital mobility and macroeconomic policy in the European Union. Capital controls and microeconomic efficiency in the Asia-Pacific region. Fiscal instability and exchange rates in Latin America

12. Negative aspects of financial internationalization. Tax evasion and tax avoidance. Transfer pricing. Money laundering.

D. Blake, Financial market analysis, John Wiley & Sons, 2000

P. de Grauwe, Economics of Monetary Union, Oxford University Press, 2000

L. J. Gitman, Principles of managerial finance, Addison Wesley, 2000

F. S. Mishkin, The economic of money, banking, and financial markets, Addison Wesley, 1998

W. Dębski, Rynek finansowy i jego mechanizmy, WN PWN, Warszawa, 2002

B. Pietrzak et al., System finansowy w Polsce, WN PWN, Warszawa 2008

J. Czekaj et al., Rynki, instrumenty i instytucje finansowe, WN PWN, Warszawa 2008

Basic and medium levelknowlegdge about markets, securities, general environment, conditions and rules for undertaking financial decisions.

KW01, KW02, KW03, KU01, KU02, KU03, KU04,

written exam, exercises similar to the presented during the course or an essay on a given topic