154-0566/02 – Trends and Innovations in Financial Markets (TIFM)
Gurantor department | Department of Finance | Credits | 4 |
Subject guarantor | Ing. Martina Novotná, Ph.D. | Subject version guarantor | Ing. Martina Novotná, Ph.D. |
Study level | undergraduate or graduate | Requirement | Choice-compulsory type B |
Year | 1 | Semester | summer |
| | Study language | English |
Year of introduction | 2019/2020 | Year of cancellation | |
Intended for the faculties | EKF | Intended for study types | Follow-up Master |
Subject aims expressed by acquired skills and competences
The course is focused on selected topics of financial markets with the emphasis on current trends, innovative financial instruments and alternative investments. The course covers main aspects of asset securitization which provides an important source of financing for a variety business. In this course, students will be provided with an overview of securitized products and alternative investments, recognize the main risks and understand the impact of regulatory changes on the market.
At the end of the course, students will be able to:
- Evaluate the importance and types of financial innovations,
- understand the concept and process of asset securitization,
- characterise the main types of securitised products,
- discuss the role of rating agencies in the financial markets,
- distinguish between the principal classes of alternative investments,
- access the importance of adding an alternative investment to a portfolio,
- characterise current trends in the financial markets.
The prior knowledge of basic concepts and tools of financial markets is essential in this course.
Teaching methods
Lectures
Summary
The aim of the course is to provide an overview of current trends in financial markets. The main focus is on asset securitization and the creation of securitized products, the role of credit rating agencies in capital markets and the essence of alternative investment.
Compulsory literature:
Recommended literature:
Additional study materials
Way of continuous check of knowledge in the course of semester
Tasks, combined examination (written and oral part)
E-learning
Other requirements
There are no other requirements on studnet.
Prerequisities
Subject has no prerequisities.
Co-requisities
Subject has no co-requisities.
Subject syllabus:
1. Financial innovations - the principle of financial engineering, new financial products
2. Principles of asset securitization - basic concept of securitization, basic terminology
3. Securitization process - process of creation of securitized products, types of underlying assets
4. Market participants in securitized products - originator, servicer, SPE, investors, brokers, state agencies
5. Residential mortgages - the characteristics of mortgage loans, mortgage market, standards of state agencies, types of mortgage loans according to credit quality
6. Securitization of residential mortgage loans (MBS) - prime and subprime mortgages, agency MBS, pass-through securitized products, prepayment risk
7. Tranching, collateralized mortgage obligations (CMO) - cash flow tranching and redistribution, CMO structure
8. Asset-Backed Securitized Products (ABS) - underlying assets of ABS products, credit risk, payment waterfall
9. Importance of securitization and current trends - causes of financial crisis, current trends in securitization
10. The role of rating agencies in capital markets - the essence and process of rating evaluation, characteristics of rating agencies
11. Regulation and current trends in rating industry - current trends in the regulation of rating agencies and the development of the rating market
12. Fundamentals of alternative investment - the definition of alternative investments and the importance of alternative investment
13. Characteristics and types of alternative investments - real assets, hedge funds, private equity
14. Investing in real assets - benefits, risk and ways of investing in natural resources, commodities, real estate and land
Conditions for subject completion
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction