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Course descriptor
Title of the course: Finance theory
Title of the
Academic
Programme
Finance
Type of the course
Obligatory
Prerequisites
Economics, Introduction to Financial Management, Mathematical Methods in Economics
ECTS workload
5
Total indicative
study hours
Directed Study
Self-directed study
Total
48
142
190
Course Overview
Course is aimed at study of the allocation of financial resources and redistribution processes and
helps us to understand what kind of laws the movement of capital between the sectors of the
economy, the state and within the financial system as a whole is implemented. It also provides the
students with the methodology of deals’ valuation, structuring and managing cash flows within the
financial system, the basics of financial planning and budget execution
Intended Learning
Outcomes (ILO)
To know: Patterns of functioning and development trends of the national and global financial system:
fiscal, budgetary system, public finance, financial market; Latest research in the field of finance
theory; Differences between the major segments of the financial markets; Efficient market
hypothesis; Financial intermediaries and their functions; Efficiency of financial operations.
To be able to: Identify key issues of information efficiency of financial markets; Highlight the
features of the functioning of financial markets in economies; Understand the essence of the changes
taking place in the financial markets; Assess the factors affecting the stability of emerging
economies; Evaluate the causes of financial crises in developing countries.
To acquire skills in: Possession of the procedure and methodology of scientific research in the
professional field; Skills of independent research work; Analysis of financial markets, budgetary,
fiscal system, public finance.
Indicative Course
Content
Introduction and history of the financial school; The financial system, financial markets, the modern
theory of finance; The theory of public finance; The budget system and its organization;
Revenues and expenditures of the state budget; Budget process. Treasury execution of budgets. The
system of inter-budgetary relations; Fundamentals of Corporate Finance; Financial assets and their
valuation; The theory of rational expectations and market efficiency hypothesis
Derivatives; International Finance and Monetary Policy
Teaching and
Learning Methods
The course is based on the active learning technologies, mostly at case studies and workshops.
Teaching and learning methods include lectures, tutorials, seminars, case studies, group work, home
assignments (individual and group projects). The written examination (80 minutes, close-booked)
containing tests, problems and case analysis is a mandatory part of the learning process
Indicative
Assessment
Methods and
Strategy
The cumulative grade (GC) is calculated as an average, based on the following equation:
GC = 0,3·Ghw + 0,3· Gsa +0.4Gt where: Ghw – grade for homework projects (average on two
projects);Gsa – grade for students’ activities at class; Gt - grade for written assignment (average on
two assignments).
The final grade (GF) is calculated as follows:
GF = 0,6·GC + 0,4·GEX , where GEX – grade for the final examination
Readings /
Indicative Learning
Resources
Course Instructor
Mandatory
The Economics of Money, Banking
and Financial Markets / Frederic S.
Mishkin – Pearson Education; 11th
edition. 2014. – 704 с.
Financial Economics (2nd Edition)
/Zvi Bodie, Robert C Merton, David
Cleeton - Pearson Learning Solutions;
2 edition, 2012. - 512 с.
Associate professor V.A. Makarova
Optional
A.B. Atkinson and J. E. Stiglitz (1980). Lectures in
Public Economics, McGraw-Hill Economics
Handbook Series
Dolar, V. and C. Meh. 2002. “Financial Structure
and Economic Growth: A Non-Technical Survey.”
Bank of Canada Working Paper No. 2002-24.
Eun, Cheol S.; Resnick, Bruce G. (2011).
International Financial Management, 6th Edition.
New York, NY: McGraw-Hill/Irwin.
Gandolfo, Giancarlo (2002). International Finance
and Open-Economy Macroeconomics. Berlin,
Germany: Springer.
Musgrave R. A., Muscrave P. B..(1989) "Public
Finance in Theory and Practice".
Pilbeam, Keith (2006). International Finance, 3rd
Edition. New York, NY: Palgrave Macmillan.