Financial Investments

Syllabus

Thematic definition of lectures: 1. Characteristics of financial investments. Characteristics and role of the financial market. Defining the basic criteria of financial investment. Relationships between investment criteria. Financial market regulation and supervision. 2. Return and rate of return on investment. What is the difference between measuring the return and the rate of return of a financial investment and comparing their time value. How yield and rate of return are calculated. Measuring the risk of financial investment and liquidity of financial investment. 3. Characteristics of efficient markets. What does an efficient capital market mean and its preconditions for this theory to be applicable in practice. What are its characteristics and how is its form tested. Characteristics of different forms of efficient market. 4. Portfolio return and risk. How is the return on a portfolio composed mainly of equities measured, while the measurement of portfolio risk is significantly different, due to another factor, namely the correlation coefficient. Specifics of fixed income portfolios. 5. CAPM model. How this model is conceived and its difference from the original portfolio theory. Introduction of a beta coefficient to simplify the view of stock risk. How to approach portfolio risk using the beta coefficient. An alternative option to measure the beta coefficient via the P / E indicator. 6. Approaches to stock price predictions. The fundamental analysis is focused on the historical financial data of a publicly traded company. Fundamental analysis uses several possibilities, such as top-down and history over time. Forms of fundamental analysis, based on dividends as well as the comparative method are presented. 7. Approaches to stock price predictions. Another approach based, as opposed to fundamental analysis, is technical analysis. What graphs are used and also what is their use in technical analysis. Comparison of three different approaches and explanation of their differences. Presentation of economic indicators and their interpretation. 8. Behavioral finance. This approach is based mainly on psychological analysis. It examines how investors respond to the current market situation, involving different parts of the cerebral cortex. Based on the research, those parts of the brain that are responsible for investment decisions have been defined. 9. Information on the financial market. The information is broken down into specific companies as well as macroeconomic information. Classical fundamental information is especially important for joint-stock companies, but this is significantly influenced by the state of the economy. Characteristics of economic indicators and their impact on joint stock companies. 10. Collective and portfolio investment. The difference between collective and portfolio investment. What are the investment strategies within the investment. Explanation of the legal framework between different forms of collective investment. Current state of collective investment. 11. Approaches to portfolio performance evaluation. The performance of the portfolio can be assessed in terms of both quantitative and qualitative aspects. The difference is in how the portfolio performs. Pointing out their basic differences and how to use it for investing. 12. Alternative financial investments. In addition to securities, it is also possible to invest in other financial instruments. These are presented mainly in the form of virtual names, collections, precious metals, or commodities. 13. Characteristics of stock exchanges. What does the stock exchange mean, what are its participants and how does its system work? Exchange participants. What are the possibilities of trading on the stock exchange. Exchange system. Types of commodity trades and commodity index, what the most important stock exchanges. Thematic definition of seminars: 1. Solution of examples and case studies, explanation of how the individual examples will be solved and what will be the solution procedure, it will also be commissioned to obtain some information from the mentioned website and add it to the table 3. Yield and return on financial investment. Recognition of the concept of yield and profitability. How to calculate the different returns (in absolute form) and also the different returns (in relative form) which are given in percentages. 4. Yield and profitability. Ex post and ex ante profitability calculation an understanding of the difference between the two calculations. A warning of a possible collision, in solving the example using a weighted average, and then an arithmetic average. 5. Total bond yield rate. The overall rate of return is easy to calculate for a zero-coupon bond. Therefore, the result is adjusted for an estimate where the fair value of the discount factor is to be replaced. 6. Expected return and portfolio return rate. Calculation of the rate of return of the portfolio as the return on the share and subsequently the return of the portfolio as the weighted arithmetic average of the returns of the individual shares of which the portfolio consists. 7. Calculation of portfolio risk. Portfolio risk calculation using the correlation coefficient and the beta coefficient. Calculation of the expected return on the stock using the beta coefficient. Compilation of SML and CML lines and understanding of their differences. 8. Calculation of the beta coefficient in an alternative form, compared to the method of least squares and covariance, through the maximum and minimum values of the P / E indicator of the company in comparison with the values of the P/E indicator of the capital market (index). 9. Calculation of the yield to maturity rate of coupon and discount bonds. Calculation of the duration of coupon bonds and their variability (change in the price of the bond to change the required rate of return by 1%). Drawing a straight line for bonds using the duration and rate of return to maturity. 10. Using of dividend models (classic and two-degrees model) to determine the possible share price. Explanation of the use of the comparative method and its use for the valuation of the company's shares, which are not yet traded on the capital market. 11. Basic approaches for evaluating the performance of mutual fund management: Sharpe ratio, Treynor ratio, Jensen alpha and RAP indicator. Calculatio of Fama decomposition for the current return of the fund and its alternative calculation. 12. Calculation of the ETF (exchange trading fund) appreciation rate as well as calculation of profitability using a CFD (contract for difference) contract. Calculation of the change in the capital market index using various forms of calculation of indices (arithmetic mean, geometric mean and market capitalization). 13. Written mid-term exam.