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Обычная версия сайта
2018/2019

Личные финансы и основы финансовой математики

Статус: Майнор
Когда читается: 1, 2 модуль
Язык: английский
Кредиты: 5
Контактные часы: 60

Course Syllabus

Abstract

The program of this discipline covers various theoretical aspects relating to the essence, financial system, financial mechanism, financial management process, financial planning. The course begins with fairly simple questions in the field of basic financial theories and issues of regulation of financial markets related to personal finances. Students will learn how classic financial models are applied in behavioral finance. Finally, students will learn the basic methods of how to make their personal financial decisions adapted to human behavior.
Learning Objectives

Learning Objectives

  • Main objective of the course of the course "Personal Finance and Financial Mathematics" is to prepare students for finance, financial analysis and planning, taking into account the impact of micro and macroeconomic factors, in providing a sufficient level of knowledge and skills that allows for conscious and effective decisions in various areas of personal management finance, such as savings, investment, real estate, insurance, tax and pension planning.
Expected Learning Outcomes

Expected Learning Outcomes

  • Student understands time value of money, patterns of financial decision making in increasing complexity of financial environment, knows mathematics of finance theory and methodology of financial decisions.
  • Student understands specific questions the theory addresses, understands that finance issues are not isolated from each other, knows how and when finance theory can be applied to achieve a desired goal.
  • Student understands, which theory is applicable in these circumstances and what are its practical limits.
  • Student is familiar with empirical evidence, which support or reject hypothesis and predictions of a theory, able to critically evaluate current research in this field.
Course Contents

Course Contents

  • The financial system, financial markets, the modern theory of finance
    The functions of the financial markets. Structure and classification of financial markets (according to the type of financial instruments, according to the method of placement of financial instruments by maturity instruments, according to the method of organization of transactions). The international financial market, eurobonds, euro. International securities market. Financial intermediaries. The role of financial intermediation to ensure the effectiveness of economic development. Types of financial intermediaries. Regulation of the financial system.
  • Macro, micro factors that determine the financial environment
    Personal circumstances that influence financial thinking, income needs and risk tolerance, wealth or asset accumulation. Systemic or “Macro” Factors That Affect Financial Thinking: business cycles, changes in the economy’s productivity, changes in the currency value, changes in other economic indicators
  • Financial information and financial assets
    Commonly used financial statements are the income statement. Results for a period are shown on the income statement and the cash flow statement. The cash flow statement: operating (recurring), financing (nonrecurring), and investing (nonrecurring). The balance sheet lists assets, liabilities (debts), and net worth. Net worth = assets - debts. Bankruptcy and the negative net worth.
  • Financial mathematics and bases of financial calculations
    Simple and compound interest. Effective rate. Banking and mathematical dis-assignment .. Applications of simple and compound interest. Models of accounts with variable capital. Commercial and actuarial rules for a binary model. Consolidated payments. Inflation accounting. Accounting for taxation of interest income Refinancing rate The notion of financial flow. Timing chart. Calculation of the value of the financial stream, which has the character of rent. Credit calculations. Repayment of debt by one payment at the end of the term. Repayment of debt in installments by differentiated and annuity payments. Long-term credit schemes. Calculation of the effective rate. Short-term credit schemes. Calculation of the effective rate
  • Hypothesis of an effective market and operations in an imperfect market
    The theory of rational expectations, formal statements and practice. Transaction costs. Liquidity. Introduction to taxation. Fundamentals of federal taxes. Early taxation and tax expenses. Average and marginal tax rates. Dividends and taxes on capital gains. Non-taxable bonds and a marginal investor. Taxes in the NPV. Tax regulation. Inflation. Determination of the inflation rate. Real and nominal interest rates. Interest rates and inflation expectations.
  • Individual financial reporting. The financial analysis.
    Common-Size Statements. Common-Size Income Statement. Common-Size Cash Flow Statement. Common-Size Balance Sheet. Ratio Analysis
  • Financial planning
    Necessity of financial planning. Objects and subjects of financial planning. Contents and purpose of financial planning. Financial plan, its meaning and essence in the process of financial planning. Types of financial plans. Tasks of financial planning. The main objectives of financial planning. Stages of financial planning. Methods of financial planning.
  • Investments and performance evaluations
    Applications and recommendations for budgeting (NPV) "Economics of Project Interaction". Final project selection rule Project pairs and external factors Comparison of projects with different indicators. Expected, typical and most likely scenarios. Future unforeseen circumstances and real options. option evaluation in a risk-neutral environment. Decision trees: one set of parameters Decision trees: one set of parameters The index of profitability. Internal rate of return (IRR) Payback period problem
  • Housing Economy
Assessment Elements

Assessment Elements

  • non-blocking Home assignments
  • non-blocking In-class participation
  • non-blocking Exam
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.2 * In-class participation + 0.5 * Exam + 0.3 * Home assignments
Bibliography

Bibliography

Recommended Core Bibliography

  • Alec N. Kercheval. (2012). Financial Economics: A Concise Introduction to Classical and Behavioral Finance, by T. Hens and M. O. Rieger. Quantitative Finance, (10), 1487. https://doi.org/10.1080/14697688.2012.695085
  • Cowell, F. (2013). Risk-Based Investment Management in Practice (Vol. Second edition). Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=755126
  • Hens, T. Financial Economics: A Concise Introduction to Classical and Behavioral Finance / Thorsten Hens, Marc Oliver Rieger. – 2nd ed. – Berlin: Springer-Verlag, 2016. – (Springer Texts in Business and Economics). - Текст: электронный // DB Springer Books [сайт]. – URL: https://link.springer.com/book/10.1007/978-3-662-49688-6
  • Shiller, R. J. (2013). Finance and the Good Society. Princeton, N. J: Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=582677

Recommended Additional Bibliography

  • Fabozzi, F. J., Modigliani, F., & Jones, F. J. (2014). Foundations of Financial Markets and Institutions: Pearson New International Edition (Vol. Fourth edition Fabozzi, Modigliani, Jones). Harlow, Essex: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1418493
  • Richards, T. (2014). Investing Psychology : The Effects of Behavioral Finance on Investment Choice and Bias. Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=759584