ZSEM Summer School

The objective of this course is to develop understanding of international markets and instruments as well as basic principles of investment in the modern financial world. The students should familiarise with all techniques of international investment and be capable to realise the appropriate instruments, markets and timing of investment in order to make efficient allocation of assets. During the course students will develop abilities to analyse and think critically about different approaches to foreign exchange determination, analysis of investment in bonds, equities and commodities through application of different theories on particular case studies. The students should be able to understand what drives the value of euro, dollar and other major currencies as well as to distinguish whether to invest money in fixed income securities or stocks.

The course covers basic and modern theories of foreign exchange determination. Here are explicitly explained monetary theory, portfolio balance theory, Mundell-Fleming model as well as modern approach to market microstructure which represents the foundation of most recent foreign exchange theories. The special emphasis is given to financial crisis and their consequences through in-depth coverage of four generation of crisis.

The importance of transaction, operating and translation exposures of multinational companies are discussed in order to explain the possibilities of hedging these exposures through application of modern financial instruments: foreign exchange forwards, futures, options and swaps.